"Loans shocker as banks demand hidden interest"

When the Central Bank of Kenya announced in March that lenders would offer a repayment holiday on personal and business loans distressed by the Covid-19 pandemic, there was excitement among many borrowers...Under CBK’s initiative, individuals and companies could take a repayment holiday, lengthen the tenure of their loans, or opt to just pay the interest for a period of time. The relief also applied to credit card debt and mortgages. “I would not have signed up if I knew I would eventually pay more,” said Mr Njiru, echoing the sentiments of many unsuspecting borrowers who aimed to take advantage of the relief programme....

...[The] Kenya Bankers Association said lenders had the leeway to restructure loans or offer repayment holidays to their customers on a case-by-case basis. “CBK provided the policy framework for banks to work with their clients with the prioritisation being the sectors hardest hit by Cocid-19; the cash reserve ratio reduction freed up liquidity for banks to work with clients on an individual basis to restructure facilities. KBA would not be in a position to give a unilateral directive on how banks restructure facilities,” said the bankers’ lobby organisation in response to the Nation...

“We see a situation in which banks engage in more predatory injury on consumers in the name of loan restructuring that never was or at best a restructuring that earns more pain on the consumer and a gain on the lender,” said the Consumer Federation of Kenya secretary-general Stephen Mutoro.