Absa Bank Kenya rescheduled loan repayments worth KES3.4 billion in the financial year ended December 2024 as it stepped in to support individuals and businesses that ran into financial challenges. 

The lender has disclosed the figure in the presentations accompanying the financial results for the review period, which also showed that it issued KES180 billion in fresh loans during a time when many lenders experienced reduced demand for credit.  

“Some sectors faced difficulties during the year, leading to significant restructuring and rescheduling to support our customers as they navigate the cycles their businesses encountered,” said Abdi Mohamed, Chief Executive Officer, Absa Bank Kenya.

“We continue to put our customers at the centre of everything we do. We remain committed to our purpose: ‘Empowering Africa’s tomorrow, together… one story at a time. We are enabling customer aspirations while supporting them in navigating a tough operating environment,” added Mohamed.

The restructuring offered relief to customers whose cash flows came under pressure on the back of economic difficulties. 

For the better part of last year, the economy was punctuated by rising interest rates that meant higher monthly interest costs for those who were serving loans. 

The Central Bank of Kenya (CBK) had raised the central bank rate (CBR) to a 22-year high of 13 percent, which lasted from February 6 to August 5 last year, as it sought to stabilise the shilling and cool inflation. 

In addition, the government’s new or enhanced contributions towards social healthcare and retirement, in an environment where salaries for many workers have been below inflation, also reduced workers' disposable income.

The situation is flipping this year as CBK continues to cut the CBR, and Absa believes this will stimulate fresh credit and relieve pressure on customers who have been struggling to honour payments. 

“Given what is happening with our macros now, we expect to see more lending in our bank and the industry as a whole, and that is a good thing for the economy and our country. We look forward to contributing to our customers’ growth stories,” said Mr Mohamed.

Cumulatively, the CBK has lowered the CBR five times—between August 6 last year and April 4 this year — by three percentage points to 10 percent.

This has allowed lenders like Absa to respond by lowering the cost of credit. Between June of last year and March of this year, Absa has cut lending rates by a cumulative 350 basis points, offering relief to its customers. 

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