Kenrick Brathwaite, Bahamas' President of the Clearing Banks Association, said continued deferrals into 2021 would be catastrophic for the banking sector.
In March, The Central Bank of The Bahamas mandated that lending institutions offer loan deferrals to borrowers who lost their jobs because of COVID-19 for a three-month period.
The figure stood at $1.9 billion as of April, which represented approximately 38 per cent of private sector credit.
Brathwaite said government employees make up the majority of private sector borrowers, followed by hotel employees and then businesses.
He said with hotels still closed and many not opening until next year, it could be disastrous for local banks.