This archive report was first published on 16 May 2020.
As the COVID-19 pandemic continues to disrupt businesses across Kenya, the banking sector is stepping in to support small and medium-sized enterprises (SMEs) affected by the crisis. On a recent online forum, Jeremy Awori, CEO of Absa Kenya, shared the ways in which banks are supporting SMEs during this challenging time.
Published on May 16, 2020, Awori noted that the pandemic has had a significant impact on businesses across the region and the world, disrupting supply chains and trade flows. Lockdown measures have also affected firms in their day-to-day operations. Despite these challenges, banks remain committed to providing banking services to SMEs, entrepreneurs, and startups.
One way banks are helping SMEs is by restructuring billions of shillings worth of loans. For instance, in the hospitality industry, lenders have restructured facilities for businesses that are expected to reopen once the pandemic subsides. Awori also mentioned that there is an expectation of a surge in customers seeking loan rescheduling based on initial assessments of applications from customers.
Banks have also waived fees for transferring money from bank accounts to mobile wallets, making it easier for online transactions to take place and removing costs for customers. This move aligns with the COVID-19 hygiene requirements.
Furthermore, banks are supporting businesses that are producing goods and services related to COVID-19, such as manufacturing masks, sanitizers, and other health products. Awori emphasized that banks will still assess SMEs' applications on a case-by-case basis, encouraging business owners to discuss their needs with their banks.
Additionally, banks are taking steps to manage their costs, particularly non-staff costs, to ensure that staff remain employed. They are also developing new business models to allow employees to work remotely, from home, and other locations, to continue offering services to customers during the pandemic and beyond.
Awori urged the government to take actions that will help alleviate the cash flow challenge faced by individuals and businesses. He suggested that the government consider deferring certain taxes and license fees, deferring NHIF and NSSF payments, paying outstanding bills at the county and national level, and providing VAT refunds to businesses.
