The Uganda Bankers’ Association has said that commercial banks have restructured loans to a tune of 2.02 trillion Shillings as a result of the effects of the COVID-19 lockdown on businesses.
According to the Association’s Executive Director Wilbrod Owor, in the first month of restructuring, commercial banks received more than 750,000 restructuring applications. Of these, 755,000 requests worth 2.028 trillion Shillings were approved.
24 per cent of the requests were from traders, 21. 4 per cent from Services, 16.5 per cent from agriculture, 16.03 per cent from real estate and 9.5 from manufacturing. 11. 5 per cent of the applications were from salary loans.
Owor says that although the loans have been restructured from three months onward, there might be a need to restructure them further if the situation doesn’t change. He was appearing before the National Economy Committee of Parliament alongside a team from the Central Bank to discuss the impact of coronavirus on the financial sector.
According to Owor, Non-performing loans are projected to increase to between 6.1 to 12.3 per cent by December 2020, although the measures issued by the Bank of Uganda could go along way in cushioning the situation. He says that the sectors to worry about are real estate, Education, Transport, Tourism and Trade which have already greatly been affected.
Appearing before the same committee the Central Bank Governor Emmanuel Tumusiime Mutebile told Parliament that COVID-19 has adversely affected borrowers’ ability to meet loan obligations, tightened and affected bank’s operations and poses a serious threat to financial system stability.
Mutebile says they are working had to ensure businesses stay operational.Download Our News App Here