Default on mortgages and loans advanced to the transport sector has crossed the Sh100 billion ($936 million) mark in the wake of layoffs, business closures and travel restrictions triggered by the Covid-19 pandemic.
The transport and real estate sectors topped loan defaults over the nine months to December last year as the country reeled from an economic crisis due to the pandemic, fresh Central Bank of Kenya (CBK) data shows.
Loans secured through title deeds and motor vehicle logbooks posted the fastest default growth rates over the period, coinciding with crippling travel restrictions and scaled down business operations to curb the spread of Covid-19.
The CBK data shows that the cumulative value of loans defaulted by the transport and real estate sectors jumped 45.25 percent between March and December to Sh99.5 billion.
The two sectors also accounted for 46.27 percent of Sh67 billion in new bad loans between March and December last year—underlying the huge knocks they suffered due to the pandemic.
Defaults in construction jumped 4.6 percent to Sh28.6 billion, pushing defaults in the transport and property market to Sh128.1 billion in December from Sh92.5 billion.
Loan defaults in the transport and communication sector rose by 81.43 per cent over the nine-month period to Sh38.1billion,