Bank of Uganda task banks to restructure loan repayments for borrowers in education, hospitality sectors

Bank of Uganda has asked all Supervised Financial Institutions to continue providing credit relief for one more year to borrowers in the education and hospitality sectors who according to the central bank are still negatively affected by the COVID19 pandemic.

This was after credit relief measures that the Central Bank put in place to help stressed borrowers cope with the effects of the COVID-19 pandemic, expired on September 30, 2021.

According to a statement issued by Central Bank Deputy Governor, Michael Ating Ego, this is to ensure that credit is available to support viable businesses in the education and hospitality sectors that remain under a partial lockdown.

“The credit relief extension means that effective 1 October 2021, borrowers in the education and hospitality sectors that had borrowed before 1 April 2020, can apply to have their loans restructured one more time on or before 30 September 2022 at the discretion of their financial institution,” he said.

The restructuring may involve but not be limited to; extending the loan tenor, reduction of amounts in their loan repayment instalments, reduction of the applicable interest rate, a moratorium on repayments, and/or a combination of these.

“All participating financial institutions are required to stop the accumulation of interest for any of the loans that benefit from this extended credit relief,” said Ating.

Loans restructured under this extended credit relief shall be exempt from penalties for late repayment and fees for early redemption.

Affected borrowers have been encouraged to contact their financial institutions to find out if they qualify, get more information and apply for this extended credit relief.