NAIROBI (Reuters) – Kenya’s central bank said on Tuesday that March 2 marked the end of the period for allowing banks to restructure loans for borrowers hit by the COVID-19 pandemic.
Policymakers unveiled the initiative to help distressed borrowers in March last year at the onset of the coronavirus crisis, helping to partly cushion the economy reeling from the pandemic impact.
Economic growth slowed to 0.6% last year, initial estimates show, well below the government’s earlier forecast of 6.2%, as the pandemic hit tourism, suppressed exports and eroded jobs. Official data for the full-year are due next month.
The amount of loans whose repayment terms were changed by lenders in the East African nation stood at 569.3 billion shillings ($5.19 billion) by the end of February, the regulator said in a statement.
That represented 19% of total loans, having dipped from 57% of total loans at the depth of the crisis, it added.
Borrowers who still have outstanding restructured loans will have until June 3 to regularise them, the bank said.
The loans relief initiative is among the last stimulus policy measures to be unwound by the government.
Authorities re-imposed charges on mobile phone-based transfers of small amounts of cash at the end of last year, having removed them in March to encourage cashless transactions and curb the spread of the virus.
In January, the government also reversed payroll and income tax cuts, unveiled last April to prop up demand in the face of the economic shocks caused by the pandemic.
Kenya, which has so far reported 122,040 cases of COVID-19 infections and just over 2,000 deaths, is currently gripped by a third wave of infections, which is stretching its health facilities.