Uganda: All Banks Have Restructured Loans Apart From One - Bou
All supervised financial institutions, save for one, have granted some kind of credit relief to their clients as a measure to mitigate the impact of Covid-19 on the economy.
Bank of Uganda's financial stability report for June has revealed that only one financial institution, which the report does not mention, has not granted any credit relief because it has not received any applications.
Daily Monitor had by press time not independently ascertained which financial institution it is.
Dr Fred Muhumuza, a Makerere University economics lecturer at the weekend, said this could be because clients saw no value in restructuring or the bank received some applications, reviewed them but declined.
On the other hand, other supervised financial institution had by July granted credit relief of loans worth Shs5.9 trillion.
"The total loans granted credit relief in April, May, June and July amounted to Shs5.9 trillion," the report said.
"The stock of loans, which were under credit relief in all banking institutions as at end of July was Shs4.8 trillion, which is equivalent to 31.2 per cent of total loans," the report added.
Bank of Uganda earlier this year directed commercial banks to restructure individual and corporate loans as the Covid-19 induced lockdown affected businesses and economies globally.
The report reveals that financial institutions have accommodated their clients demands and adhered to Bank of Uganda instructions. "The acceptance rate for applications for credit relief was very high at 98.3 per cent, with 893,018 applications approved out of 895,241 applications," the report reads in part.
It is also reported that the trade, real estate, manufacturing, and transport sectors have benefited most from the restructuring.
Loans due for repayment
Loan restructuring kicked off in April where over Shs2 trillion worth of loans was restructured.
According to BoU, the initial credit relief granted in form of a loan repayment holiday in April-May 2020, which was estimated at Shs1.3 trillion, is starting to mature. Read more on All Africa
Source: All Africa