This archive report was first published on 16 June 2020.
As the COVID-19 pandemic continues to ravage the global economy, Absa Kenya has taken steps to support its customers affected by the crisis. On June 16, 2020, the bank announced that it had restructured Sh54 billion loans, equivalent to about 26.7 percent of its net loans at the end of March.
The restructuring effort aims to cushion customers hit by job cuts, unpaid leave, and small businesses struggling to survive the economic slowdown caused by the disease. According to the bank, 90 percent of the reviewed loans are from workers and small businesses in dire need of urgent help.
Jeremy Awori, CEO of Absa Kenya, stated, "We are working together with them (customers) through this loan relief programme to reduce the burden on their monthly financial obligations." The relief programme applies to personal loans, mortgages, asset finance, credit cards, and business loans with a repayment holiday of up to three months.
During the repayment holiday period, borrowers will pay loan interest accrued, but will not incur additional restructuring costs. The bank's net profit for the three months to March rose 2.8 percent to Sh1.95 billion.
Kenya's economy, which relies heavily on farming, tourism, and remittances from citizens abroad, is suffering from job losses caused by the crisis. The country has 3,727 confirmed cases of COVID-19, and the Central Bank of Kenya has taken measures to ease the economic shocks, including cutting lending rates and lowering the cash reserve ratio.
