EADB reschedules debtU$40m to assist clients navigate Covid-19challege

20Jan 2022
By Guardian Reporter
The Guardian
EADB reschedules debtU$40m to assist clients navigate Covid-19challege

CLIENTS of East African Development Bank had their dents valued at U$40 million rescheduled in 2019/20 fiscal year to allow them navigate the turbulence brought about by the coronavirus pandemic.

EADB’s director general, Vivienne Yeda.

EADB’s Director General, Vivienne Yeda said in last year’s annual report that the bank maintained close relationship with customers to understand their challenges and provide needed support which included moratorium in loan repayment where underlying projects were negatively impacted.

“The bank’s technology facilitated remote working and ensured that service delivery was not significantly impacted. As a result, the bank managed to reschedule loans totalling above U$40 million, which was slightly above a quarter of the whole loan portfolio,” Yeda said.

She pointed out that most of the customers subsequently did very well following the flexibility provided to keep liquidity that was required to support business instead of repaying the loans. Performance of the underlying loans has remained good.

“Over the period 2016-2020, the bank’s liquidity coverage ratio, which is a measure of its liquid assets relative to its liabilities, improved from 2.2 times in 2016 to 5.7 times by the end of 2020,” Yeda noted while adding that the ratio for non performing loan improved from 6.9 percent in 2016 to 5.9 percent by the end of 2020 as the bank continued to pursue a prudent lending approach,” the EADB chief added.

Yeda further explained that the outstanding portfolio size as at 31 December 2020 was U$134.22 million compared to U$153.25 million as at 31December 2019 attributing the drop in the gross portfolio to slowdown in net lending following disruption of economic and business activities by the Covid-19 pandemic.

As for this year, the Kampala based bank said it shall prioritize investment in sectors of strategic significance to member countries, especially those which maximize development outcomes while pursuing prudent lending policies supported by robust risk management.

The EADB’s Chairman of the board, Keith Muhakanizi said during 2020, the bank continued to pursue its mission to promote sustainable social economic development in East Africa by providing development finance, advisory and support services.

“Despite challenges emanating from the COVID-19 pandemic and the impact of measures taken to contain it, EADB implemented activities to consolidate performance under its Strategic Plan (2016-2020),” Muhakanizi said.

He said the EADB’s Strategic Plan for 2021/25 is under preparation and will be launched this year and will build on the results from the previous plan and aim at consolidating the bank’s role in the development of member states.