Commercial banks have restructured loans amounting to Rwf647.3 billion in a bid to cushion Rwandans from making monthly payments, according to the National Bank of Rwanda (NBR).

This is part of the series of measures in place that is expected to shield hundreds of Rwandans with existing loans from adverse effects of the pandemic.

The National Bank of Rwanda had requested banks to revise contracts of people who were affected by the pandemic to ease their repayment burden, as part of the series of economic recovery measures.

Data from the Central Bank indicates that all commercial banks in the country had restructured 83,133 loans worth Rwf647.3 billion as at the end of April this year.

This represents 28.4 per cent of their total loan portfolio.

A teller counts notes at a commercial bank in Kigali. The National Bank of Rwanda had requested banks to revise contracts of people who were affected by the pandemic to ease their repayment burden, as part of the series of economic recovery measures. Photo: File.

The Central Bank did not issue any guidelines to how banks should restructure their clients’ loans, but it encouraged banks to restructure loans for clients impacted by Covid-19, which would be handled case by case.

"Banks are therefore not obliged to restructure all loans, but assess case by case,” an emailed statement from the bank to this publication reads in part.

Many businesses are experiencing financial distress rising from cash flow problems caused by the effects of the pandemic.

Banks have become flexible to restructure their clients’ loans, allowing them the flexibility of paying at a later date as business activity slowly recovers from the virus.

Maurice Toroitich, the Chief Executive Officer at Bank Populaire du Rwanda (BPR) told The New Times that his bank has restructured a third of their loan book as of mid-June.

"We have restructured loans worth Rwf55 billion. We have not changed our interest rates, but we have given our clients varied interest moratoriums,” he noted.

Most of the loans were restructured for hard-hit sectors and their value chains, he added, highlighting travel and tours operations, transport and communication, as well as trade and commerce, among others.

The BPR CEO said they have extended the backend of the repayment provision for a period of three to 12 months depending on the nature of the business, and their fair assessment of when they think business will recover.

Fortunes of sectors like travel have been hurt, with revenue from foreign visitors coming to Rwanda dropping by 35 per cent in the first quarter of 2020 compared to the same period last year.

According to KCB Rwanda Managing Director, George Odhiambo, KCB has restructured 830 loans worth Rwf70 billion for transportation, hotels, tourism, construction, manufacturing, general trade, and commercial mortgages.

The Finance Minister told lawmakers on Monday, June 22 that travel and transport services in Rwanda will reduce by 70 per cent this year due to the impact Covid-19 has exacerbated on the sector.

The flow of Foreign Direct Investments (FDIS) to Rwanda, an important growth element of the country’s economy, will reduce by 62 per cent this year.