The Bank of Uganda (BoU) has asked all Supervised Financial Institutions (SFI) to continue providing credit relief for one more year to borrowers in education and hospitality sectors who are still negatively affected by the COVID-19 pandemic.
The credit relief measures that the BoU put in place to help stressed borrowers cope with the effects of COVID-19 expired on 30th September 2021.
In a statement dated November 18, 2021, Michael Atingi-Ego, the BoU Deputy Governor says this is “to ensure that credit is available to support otherwise viable businesses in the education and hospitality sectors that remain under a partial or total lockdown.”
“This credit relief extension means that effective 1 October 2021, borrowers in 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,” BoU says, adding that the restructuring may involve but not limited to; extending the loan tenor; reduction of amounts in their loan repayment installments; reduction of the applicable interest rate; a moratorium on repayments and/or a combination of these.
BoU has further directed that all Participating Financial Institutions stop the accumulation of interest for any of the loans that benefit from this extended relief.
“In addition, loans restructured under this extended credit relief should be exempt from penalties for late repayment and fees for early redemption,” BoU says.