KAMPALA – Bank of Uganda (BoU) has explained that the current credit relief measures to mitigate the adverse effects of the COVID-19 pandemic must not exceed 12 months.
BoU further insists that the credit relief measures do not eliminate the debtor’s obligation to repay borrowed funds.
BoU in its Monetary Policy Statement of April 06, 2020 issued credit relief measures to mitigate the adverse effects of the COVID-19 pandemic, ensuring financial sector stability, and facilitating the financial intermediation process during this pandemic period.
But on Friday, April 17, BoU acting Deputy Governor Dr Adam Mugume, said that the loan repayment holidays are for a maximum of 12 months.
“These credit reliefs shall only be granted within the 12 month period with effect from April 01, 2020,” he said in a statement.
Dr Mugume added that the credit status at the time of granting a repayment holiday shall remain unchanged for the duration of the said repayment holiday.
He also said that the prepayment of arrears as a condition for restructuring a credit facility is suspended for 12 months with effect from April 01, 2020
He issued other directives, which include; consumer protection remains paramount, and any credit relief(s) offered must be in the best interest of customers, and with full disclosure.
The decision to offer a credit relief to a customer or decline a request for a credit relief from a customer is the responsibility of the Supervised Financial Institution (SFI).
Borrowers are encouraged to request, and SFIs may offer, credit relief. In either case, the borrower must consent to any credit relief granted.
The credit relief measures contained herein, do not eliminate the debtor’s obligation to repay borrowed funds. Furthermore, these credit reliefs are to be extended to borrowers of Commercial Banks, Credit Institutions, and Microfinance Deposit Taking Institutions (MDIs) supervised and licensed by BoU. The allowable credit relief measures and terms thereof include:-
“Bank of Uganda assures the public of its commitment to safeguard financial sector stability. The application of these credit relief measures shall be monitored, and BoU stands ready to issue additional measures as risks from the COVID-19 pandemic evolve. For more information, please contact the Director, Communications Department via telephone +256(0)414258441/6 OR e-mail firstname.lastname@example.org AND email@example.com,” he said.