2 Minutes Read Reuters, NAIROBI, July 15 – The impact of COVID-19 on restructured loans by Kenya’s small and medium-sized enterprises increased tenfold in 2020 compared to a year earlier, according to the central bank. Last year, the central bank took steps to assist these enterprises in surviving the economic slump caused by the coronavirus, which put many of them at risk of shutting down. In March 2020, as part of these initiatives to help distressed debtors, the central bank enabled banks to modify loans for companies affected by the COVID-19 outbreak. Small and medium-sized firms restructured 234.7 billion shillings ($2.17 billion) in loans last year, according to the central bank, up from 20.6 billion shillings in 2019. “The detrimental impact of the COVID-19 pandemic triggered restructuring in 2020, which aimed to cushion affected borrowers by reducing debt servicing terms,” according to the central bank’s survey. In 2020, the commerce sector accounted for 74.2 percent of restructured loans, according to the report. On March 2 of this year, the deadline for banks to provide relief to customers expired. By the end of February this year, the amount of loans whose repayment terms had been altered by lenders had risen to 569.3 billion shillings ($5.19 billion), according to the central bank. According to the bank, this amounted to 19% of total loans restructured, down from 57 percent at the height of the crisis. In October, the government established a credit guarantee scheme for coronavirus-affected small and medium-sized businesses, estimating that its capital would eventually climb to at least 100 billion shillings. Kenya’s economy is expected to revive this year, with the finance ministry expecting 6.6 percent growth in 2021, up from 0.6 percent in 2020, when COVID-19-related limitations caused industries including tourism and allied services to collapse. 108.1000 Kenyan shillings = $1 (George Obulutsa contributed reporting; Omar Mohammed and Jane Merriman edited the piece.)/n
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