Commercial banks have now restructured loans amounting to Sh1.63 trillion, which is more than half of all loans in the country due to the Covid-19 pandemic.
This is after borrowers, hard hit by the health crisis, took advantage of the relief announced by the Central Bank of Kenya (CBK).
The CBK said on Wednesday that the Sh1.63 trillion restructured is equivalent to 54.2 percent of the total banking sector loan book of Sh3 trillion by the end of December.
For other sectors, a total of Sh 1.29 trillion had been restructured mainly to trade (21.3 percent), manufacturing (20.4 percent), real estate (15.4 percent) and agriculture (12.4 percent).
The CBK said of the Sh35.2 billion that was released by the lowering of the Cash Reserve Ratio (CRR) in March, Sh32.6 billion (92.7 percent) has been used to support lending, especially to the tourism, trade and transport and communication, real estate, manufacturing and agriculture sectors.
Growth in private sector credit stood at 8.4 percent in the 12 months to December 2020, as demand recovered with the improved economic activity.
Strong credit growth was observed in manufacturing (12 percent), transport and communications (13.6 percent), agriculture (15.3 percent), real estate (8.7 percent) and consumer durables (18.1 percent).
The MPC, which sets the rates banks use as a basis to price their loans, noted that the package of policy measures implemented since March 2020 were having the intended effect on the economy, and are being augmented by implementation of the announced fiscal measures in the FY2020/21 Budget. This saw the team retain the Central Bank Rate at 7 percent, which means that banks will retain the rates they are charging borrowers at the current levels. [email protected]
