Local banks will ease loan repayment conditions to borrowers whose income streams have been affected by the global COVID-19 pandemic.
This was announced by the financial sector regulator, the Central Bank following an engagement with local banks in a bid to come up with measures to mitigate the economic impact of the pandemic.
With the global pandemic expected to affect businesses and their revenue streams, it was agreed that banks will ease loan repayment terms and conditions for borrowers affected.
This is likely to minimise the implications of the coronavirus outbreak on sustainability of firms and an attempt to facilitate survival.
Rwanda has already registered 11 cases of the virus, the latest being three new ones that were announced by the health ministry yesterday.
“Banks are exceptionally allowed to restructure outstanding loans of borrowers facing temporary cash flow challenges arising from the COVID-19 pandemic,” the statement signed by Central Bank Governor John Rwangombwa read in part.
Speaking to The New Times, Rwangombwa explained that eligible borrowers for loan restructuring will demonstrate ways in which the pandemic has affected their cash flows and negotiate on new structures of their credit.
The intervention comes at a time when a number of sectors have noted that they could be affected following the pandemic reduced their cash flow and revenue.
Among the sectors that could use the eased loan repayment include operations within the service industry such as tourism, hospitality sector, logistics and transport among others.
The restructuring of loans and ease of loan repayment will also allow firms to keep supply and value chains open by re-investing the returns from their revenue.
This will see the country maintain supply of goods and products necessary for consumption.Follow https://twitter.com/ByCollinsMwai