East Africa’s top retail banks booked more than $125 million of bad loans in the nine months to September this year, as borrowers struggled to repay their loans following the expiry of a 12-month loan repayment relief programme for customers adversely impacted by the Covid-19 pandemic.
This comes as regional banking regulators in Kenya, Tanzania and Rwanda have raised concern over the rise of bad loans, which is now threatening the financial sector. Last week, Rwanda’s central bank reinstated regulatory requirements for commercial banks to increase provisions on loans that had been suspended due to the pandemic to allow banks to continue lending. The reinstatement could affect loans to the private sector.
Meanwhile, Bank of Tanzania (BoT) has introduced measures to address non-performing loans, which include zeroing in on individual bank employees who are directly responsible for…