COVID third wave hits real estate and transport hard

By Antony Mutunga

COVID containment measures such as curfews and lock-downs continue to hit businesses hard, particularly in the real estate and transport sectors, which recorded ‘the most difficult year in 2020.’

According to Central Bank of Kenya data, transport and real estate recorded the highest number of defaults between March and December 2020, with the value of loans defaulted increasing by 45.25 percent to Sh99.5 billion.

Additionally, the two sectors were responsible for a big chunk of new bad loans in the period. accounting for 46.27 percent of Sh67 billion in new bad loans. Particularly, loans acquired with title deeds and motor vehicle log books as collateral posted the fastest default rates over the period. 

Experts attribute this trend to travel restrictions which saw many business trips cancelled and a major dip in activity in the business world as governments moved to curb the spread of the virus.

2021, the so-called year of the ‘Third Wave’ has been equally punishing. Punitive lockdown measures now emerge as the trigger for additional job layoffs and business closures , spelling further doom for the business world and the economy in general.