March 18, 2020 / 9:00 AM / 14 days ago

UPDATE 2-Kenyan, Rwandan banks to offer relief to distressed borrowers, central banks say

(Adds Rwanda central bank taking similar action)

NAIROBI, March 18 (Reuters) - Kenyan banks will allow personal borrowers who get into difficulties because of the coronavirus crisis to extend their loans for up to a year, the central bank governor said on Wednesday.

The East African country has four confirmed cases of the COVID-19 disease caused by the virus, and the government has imposed measures aimed at reducing its spread, including banning public gatherings and closing schools indefinitely.

“We don’t want this health crisis to become a financial crisis,” Patrick Njoroge, the governor, told a televised news conference.

Personal loans make up a fifth of the total borrowing in the industry, Njoroge said, adding that it would be up to individuals who encounter challenges to request the relief from banks.

Small and medium enterprises who encounter difficulties will also be allowed to restructure their bank loans at no cost, once they have approached the lenders, he added.

President Uhuru Kenyatta, who was also at the briefing, said the epidemic would hit the economy. “It is a health crisis that is bound to have financial and economic impact ... Our tourism is going to take a hit,” the president said.

Kenyatta warned traders who try to hoard goods or hike prices of essential goods like hand sanitizers and food during the crisis.

“It is criminal for you to really use an unfortunate situation to enrich yourself,” he said.

The competition watchdog said on Monday it had forced a small supermarket chain to refund shoppers who it had overcharged for bottles of hand sanitizers.

Elsewhere, Rwanda’s central bank said on Wednesday it had asked commercial banks to ease loan repayment terms for borrowers affected by the fallout from coronavirus, and said it would lend the banks 50 billion francs ($53 million).

Rwanda has 11 confirmed coronavirus cases. ($1 = 943.9360 Rwandan francs) (Reporting by Duncan Miriri and George Obulutsa; additional reporting by Clement Uwiringiyimana in Kigali. Editing by Jane Merriman)

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