Wednesday, March 18, 2020

CBK Direct Banks To Extend Loan Repayment Durations

    March 18, 2020   No comments

Central Bank of Kenya (CBK)

Through a press release Wednesday 18th March , 2020, Kenyan commercial banks' regulator has directed lenders to extend repayment duration for loans up to one (1) year without added charges.

The release had emergency measures to mitigate the adverse economic effects on bank borrowers in this Coronavirus pandemic.

It is expected that the difficulty borrowers are facing in repaying the loans is as a result of the virus effects, therefore, they should be given a longer period before they pay and the banks should take care of the expenses arising during that period. No charges to be imposed on a borrower.

A borrower is to approach the lender and ask for the elongation of the repayment period for this to be effective on the borrower's loan facility.

An early release by the CBK provided directives to banks and PSPs not to charge any fees on transactions arising from transfer between mobile wallets and bank accounts. Today's release added that banks waive all charges on balance enquiry.

Here are the Emergency Measures In 18th March, 2020 CBK Press Release 

To help alleviate the adverse effects, the following emergency measures will apply to borrowers whose loan repayments were up to date as at 2nd March, 2020;

  • Banks will seek to provide relief to borrowers on personal loans based on their individual circumstances arising from the pandemic. 
  • To provide relief on their personal loans, banks will review requests from borrowers for extension of their loan for a period of up to one year. To initiate this process borrowers should contact their respective banks.
  • Medium sized enterprises (SMEs) and corporates borrowers can contact their banks for assessment and restructuring of their loans based on their respective circumstances arising from the pandemic 
  • Banks will meet all the costs related to the extension and restructuring of loans. 
  • To facilitate increased use of mobile digital platforms, banks will waive all charges for balance enquiry. 
  • All money reaching the banks will be quarantined for a week before allowed back to public. 

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Mwabaya Katana

About Mwabaya Katana

Mwabaya Katana is a Finance Online Researcher and Writer.He is the founder of 'Loans Kenya' Blog.

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