Top banks in E.Africa record US$125m in bad loans

Top retail banks in East Africa booked over US$125 million in bad loans over the nine month-period ending September 2021, as borrowers strive to repay their loans after the expiration of a 12-month loan repayment relief program put in place to support customers who have suffered I’ll fate as a result of the Covid-19 health and resultant economic crisis.

This comes as regional banking regulators in Kenya, Tanzania and Rwanda have voiced their worries over the increase in the rate of bad loans, which is considered as posing an existential threat to the entire structure of the financial sector.

Last week, Rwanda’s apex lender reinstated regulatory requirements for commercial banks to raise provisions on loans that were previously suspended due to the pandemic to help lenders continue lending. The reinstatement is also expected to affect loans to the private sector.

Meanwhile, Bank of Tanzania (BoT) has also put some measures in place to address non-performing loans. This includes zeroing in on individual bank employees who are directly responsible for issuing the loans.