Borrowers can sigh in relief as banks take new measures to cushion individuals and businesses that find themselves in financial distress as a result of the fast-spreading coronavirus (Covid-19).
In meeting with President Uhuru Kenyatta at State House on Wednesday, Central Bank of Kenya (CBK) Governor Patrick Njoroge said the deal reached with commercial banks will help reduce the economic pressure that individuals and businesses may encounter due to the coronavirus threat, which has already slowed down trade.
Treasury and commercial banks chiefs were also present.
Lenders and other financial institutions are expected to restructure their loans with customers in cases where borrowers are not able to honour their obligations on time, Dr Njoroge said.
Under the deal, the banks will offer short payment holidays or reschedules on loans payments of up to one year.
“Banks will seek to provide relief to borrowers on personal loans based on their personal circumstances and arising from the pandemic,” said the CBK boss.
Kenya Bankers Association (KBA) chairman, KCB chief executive Joshua Oigara said personal customers affected by economic fallout from Covid-19 will be allowed payment breaks or flexible arrangements on home and other loans.
Dr Njoroge, meanwhile, said as part of efforts to rein in the virus spread all notes received from banks will be quarantined for a week.
President Kenyatta said more fiscal measures are expected to be rolled out in the near future to cushion Kenyans against the economic pressure brought about by the outbreak.
He also signalled the Kenyan economy is bracing for a wave of job losses as the outbreak disrupts business.
“There will be those who will be forced to take half pay or will be laid off,” he said.
The President also warned retailers and traders not to use coronavirus as an excuse to rip off customers saying the government will take action against companies that charge excessive prices for essential goods.
Some retailers and traders have ratcheted up prices of soap and hand sanitising gel and some food items in response to the spread of the virus. The surge in demand for such items has led to many pharmacies and supermarkets selling out.
“We are going to take action on those people because it is criminal for you to use an unfortunate situation to enrich yourself,” said President Kenyatta.
“This is not the time to take undue advantage of our people…Nobody in this country has ever had a problem with somebody making profit but indeed it is highly immoral if we take advantage of an unfortunate situation to make supernormal profits.”