The Bank of Uganda (BoU) has announced extension of credit relief for borrowers in the education and hospitality sectors that were negatively affected by the impacts of Covid-19.
This comes after the credit relief measures that the regulator had initially put in place in April last year to help stressed borrowers expired on September 30, 2021.
In a statement released on Thursday, BoU’s deputy governor Michael Atingi-Ego, asked all supervised financial institutions to extend credit relief for an extra 12 months to borrowers in the education and hospitality sectors.
The move according to Atingi-Ego, is aimed at ensuring that there is credit support for viable businesses in the two sectors that remain under a partial or total lockdown.
“This credit relief extension means that effective October 1, 2021, borrowers in the education and hospitality sectors that had borrowed before April 1, 2020, can apply to have their loans restructured one more time on or before September 30, 2022, at the discretion of their financial institution,” Atingi-Ego said in a statement.
The deputy governor noted that the restructuring may involve but not be limited to: extending the loan tenure, reduction in the amounts in their loan repayment installments, reduction of the applicable interest rate and a moratorium on repayments and/or a combination of these.
Atingi-Ego further warned participating financial institutions against accumulation of interest for any of the loans that benefit from the extended credit relief.
“Loans restructured under this extended credit relief shall be exempt from penalties for late repayment and fees for early redemption,” he said.