BANK OF UGANDA DIRECTS FINANCIAL INSTITUTIONS TO CONTINUE FINANCIAL CREDIT RELIEF TO EDUCATION AND HOSPITALITY SECTORS TO RECOVER FROM COVID -19 EFFECTS

The Bank of Uganda (BoU) has directed all Supervised Financial Institutions (SFI) to continue providing credit relief for at least another year to allow private sector players in the education and hospitality sectors recover from an economic meltdown caused by a two year rampaging -Covid -19 pandemic .

This is after the credit relief interventions that the financial institutions regulator – BoU put in place to aid businesses and or borrowers – battered by the COVID-19 expired on 30th September 2021.

A statement dated November 18, 2021 and signed by Michael Atingi-Ego, the BoU Deputy Governor reads in part;” 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.”

The extension is meant 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.

According to the Central bank , loans 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. Bank of Uganda also directed that all  Participating Financial Institutions should stop the accumulation of interest for any of the loans that benefit from the extended relief.

The Central bank also guided that loans restructured under the credit relief one year extension should be exempt from penalties for late repayment and fees for early redemption.

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