Relief As CBK Hands Borrowers 3-Month Loan Repayment Extension

The Central Bank of Kenya (CBK) has extended the loan repayment for customers whose loans were performing before 2^ndMarch 2020 for another three months to 3^rdJune 2020.

The move follows expiry of the one year loan repayment period granted bv the regulator on borrowers which elapsed on 2^nd March 2021.

“Specifically, banks will from March 3, 2021, asses the performance of all restructured loans that were performing before March 2, 2021. The period for determining the performance of all restructured loans will begin on March 2,2020 but went into arrears after that date,” CBK stated.

According to CBK, total loans restructured since March 2020 amounted to Kshs. 1.7 trillion by the end of February 2021 accounting for 57% of the banking sector gross loans.

“Over 95% of the outstanding restructured loans are being repaid in accordance with the restructured terms.”

CBK introduced emergency loan restructuring measures in March last year to cushion borrowers from adverse effects on COVID-19 pandemic and ease pressure of meeting their loan obligations with their banks.

CBK says the measures which saw banks extend repayment period for loans performing before the pandemic struck, issuance of moratorium on principal or interest and waiver on interest fees helped mitigate job losses while helping borrowers and lenders navigate through the pandemic.