This archive report was first published on 22 May 2020.
As the COVID-19 pandemic took hold in Kenya, the Central Bank of Kenya (CBK) introduced measures to cushion the economy, including doubling the mobile money transaction limit to Sh300,000. By late April and early May, Kenyans had taken full advantage of this, moving Sh564 million per day via mobile money channels.
According to CBK statistics, the Sh70,001 – Sh150,000 transaction band recorded a daily average of 5,457 transactions worth Sh564.48 million per day from April 20 to May 10. This was an increase from the Sh428.5 million daily average recorded in the period between March 16 and April 19.
Dr. Njoroge, the CBK Governor, attributed the increase in mobile money transactions to the waiver of fees for up to Sh1,000. He stated, 'This confirms that the waiver of fees for up to Sh.1,000 encouraged more mobile money transactions.'
Additionally, the Sh101- Sh500 band recorded an increased average of 2 million transactions per day worth Sh235.57 million. The Sh70,001 to Sh150,000 band recorded an increased average of 19,949 transactions per week worth an average of Sh339 million in April and May.
As part of the emergency measures, the CBK also allowed the seven largest banks in the country to restructure loans worth Sh176 billion in April. This was in response to more Kenyans seeking moratoriums on loans. A total of 39,725 personal/household loan account customers successfully applied for an extension of their tenors on loans amounting to Sh102.5 billion.
Most of the loans extended were for 9-12 months, which accounted for 47.7 percent of the Personal/household sector loans extended. As of May 15, eighteen commercial banks and two microfinance banks had been granted approval to access Sh29.08 billion freed from the reduction in Cash Reserve Ratio (CRR). This accounted for 82.61 percent of the Sh35.2 billion freed by the 1 percent reduction in CRR as part of the stimulus measures announced by CBK.
