The total number of restructured real estate loans in Kenya reached 5,786 between Match and June 2020 according to the Central Bank of Kenya’s Financial Stability Report.
The total value of restructured loans for the real estate sector during the period reached KSh. 123.8 billion. Outstanding loans for the sector stood at KSh. 429.6 billion.
Another 1,615 loans were restructured for the building and construction industry during the period with a total value of KSh. 35.9 billion.
CBK had instituted accommodative monetary policy and financial measures following the pandemic.
This included asking banks to renegotiate terms and restructure loans for borrowers, whose loans were performing as at March 2, 2020 but now faced difficulties in servicing their loans as a result of the pandemic.
SASRA also allowed SACCOs to restructure and renegotiate loans to ease pressure on their members facing difficulties in repaying loans due to the pandemic.
Saccos restructured loans totaling KSh 4.7 billion in 3 months to June 2020, reflecting the difficulties members were facing in loan repayment.
The report says the Covid-19 pandemic eroded the banks’ asset quality gains made in 2019 as shown by the increased Non-Performing Loans (NPLs).
Assets quality was affected among other things by delayed government payments to suppliers, low real estate occupancy rates and prices, weak credit underwriting standards, and drought.