Banks to submit details of all suspended loans by Friday, April 10, 2020, following coronavirus pandemic in Kenya

Banks to submit details of all suspended loans by Friday, April 10, 2020, following coronavirus pandemic in Kenya

Loan Amnesty lists to be released on Friday, April 10, 2020

All banks in Kenya have been directed to submit loan amnesty lists by Friday April 10, 2020.

This list will contain details of all renegotiated loans under the payment relief to support businesses and individuals during the covid-19 pandemic in Kenya.

The Central Bank of Kenya, CBK has already come up with strict measures that will be used to track loans likely to be extended including monthly reports by the banks indicating how the relief was offered.

According to a circular released by the CBK, loan lenders shall meet all restructuring costs and submit returns on the 10^th of every succeeding month.

For instance, the initial return for the month ending March 31, 2020 will be due on or before April 10, 2020.

Evidence

According to the CBK, individuals and small businesses seeking loan amnesty must prove beyond a reasonable doubt that they cannot repay their loans.

Thereafter banks will be allowed to restructure the loans without affecting the quality of loan books. Normally, banks are expected to allocate some part of their profits to cater for non-performing loans, an extra cost to the banks.

By December 2019, Kenyans had defaulted on Kshs 331.3 billion, an amount which accounts for close to 12 % of the total Kshs 2.774 trillion outstanding loans.