This archive report was first published on 13 May 2020.
With the Covid-19 pandemic having a devastating impact on the economy, many Kenyans are struggling to make ends meet. As we enter the month of May, reduced salaries, lower pay, and unemployment are becoming increasingly common.
However, the banking sector has a crucial role to play in supporting customers and communities during this difficult time. As financiers of the economy, banks must be bold and take proactive steps to meet the needs of their customers.
While the Central Bank of Kenya's (CBK) relief measures in March were a step in the right direction, the banking sector must take bolder steps. This includes considering loan forgiveness, loan restructuring with meaningful interest rate reductions or waivers, and extending forbearance to non-performing loans.
By taking these steps, banks can reassure customers that they are committed to offering constructive and pragmatic solutions, even after the expiration of CBK relief measures. This will be crucial in helping customers and communities weather the economic storm.
Moreover, banks must be proactive in reaching out to their customer base to determine their needs and provide support. Solutions can come from both top-down and bottom-up initiatives, and ongoing flexibility from the sector will be critical in the recovery process.
As Ms. Mutungi, a career international corporate banker and financial services adviser, notes, banks must reject financial expediency and prioritize supporting their customers and communities. By doing so, they can demonstrate their commitment to corporate citizenship and help the economy recover from the pandemic.
