This archive report was first published on 22 May 2020.
Coronavirus Pandemic Hits Kenyan Economy ¶
As the Coronavirus pandemic continues to spread, its impact on the Kenyan economy is becoming increasingly apparent. Job and pay cuts have forced workers to restructure bank loans worth Sh102 billion by the end of April, according to the Central Bank of Kenya (CBK).
CBK Governor Patrick Njoroge disclosed that 29 banks have reviewed the terms of personal loans equivalent to about 13 percent of credit offered to workers on the strength of their pay slips. The bulk of the restructured personal loans involve placing a moratorium on both interest and principal payments for up to one year.
‘Most of the loans extended were for 9 to 12 months, which accounted for 47.7 per cent of the personal and household sector loans extended,’ Dr Njoroge said during a panel discussion hosted by the Kenya Private Sector Alliance (Kepsa).
Unsecured loans topped the list of restructured loans, followed by businesses in the trade sector at Sh44.8 billion, real estate (Sh31.6 billion), and tourism and manufacturing sectors tying at Sh23.1 billion.
The CBK allowed lenders to offer relief to distressed customers in mid-March after the first case of the Covid-19 was reported to ease the pain of coronavirus-related hardships and bank defaults. The bankers had by the end of April restructured loans worth Sh273 billion.
Kenya has reported 1,109 positive Covid-19 cases and 50 deaths. The crisis has shut down the country’s vital tourism sector, hammered its fresh produce exports, and severely disrupted other sectors like construction, trade, and transportation.
