Government to ask banks to reschedule loan payments for customers over Covid-19

President Museveni has said government will soon start negotiations with various financial institutions to see how they can reschedule loan payments for their customers because of the current Covid-19 pandemic ravaging the world.

The president on Tuesday announced an extension of the lockdown for another 21 days after expiry of the initial two weeks.

However, speaking about the lockdown, Museveni said government cannot stop order financial institutions to forget the loans but noted they would enter into negotiations to see how to reschedule their payment to a later time.

“….. we are going to discuss with banks to see how to solve that issue. Not to pay for you who have loans but to see a way of stretching out the time. We shall not allow them to make fools of themselves in such a time,”Museveni said.

He noted that government will ask banks to give customers with loans a two month grace period due to the ongoing coronavirus pandemic because most of their businesses are closed and therefore are not working.

Following the announcement of a lockdown, several businesses which don’t offer essential services were closed yet many of them were servicing loans from banks.

The president however said government will do something to save the businessmen.

“We are going to discuss with the banks to see how to help the people, not to pay the loans for them but I don't support the banks confiscating their property.”

On Monday, Absa bank announced it had rolled out an extensive repayment plan for customers with loans of up to six months grace period.

Under the plan, customers in sectors that have been directly or indirectly affected by the disruption presented by Covid-19 will be offered payment relief to ease their financial burden.

“While we appreciate the measures put in place globally to curb the spread of this pandemic, we are also cognizant of the effects they have had on individuals and the business community. Customers will be offered payment holidays of up to six months, with needs being determined on a case-by-case basis and solutions tailored on individual circumstances; through proactive engagement with our customers,” said Mumba Kalifungwa, the Absa bank Managing Director .

In light of this, we are therefore aware that some of our customers will experience difficulty meeting their financial obligations and we have introduced a comprehensive customer, business and corporate relief program to help them navigate this difficult time,” he said.