Reprieve for borrowers as CBK, lenders devise mitigation measures in the wake of Covid-19

Following a meeting with commercial banks on Monday the Central Bank of Kenya (CBK) has announced a set of measures that commercial banks will undertake in order to alleviate the adverse economic effects their customers may face from the Coronavirus pandemic (COVID-19).

Kenya confirmed its first case of coronavirus on March 13 with further six cases confirmed today (Wednesday).

“While the extent of the adverse effects are still evolving, it is already evident that the impact on some of the customers may be severe. To help alleviate the adverse effects, the following emergency measures will apply for borrowers whose loan repayments were up to date as at March 2, 2020,” said CBK Governor Dr. Patrick Njoroge at State House on Wednesday.

As a result local banks will seek to provide relief to borrowers on their personal loans based on their individual circumstances arising from the pandemic.

To provide relief on personal loans, banks will review requests from borrowers for extension of their loan for a period of up to one year. To initiate this process, borrowers should contact their respective banks.

Also to benefit from that decision will be Medium-sized enterprises (SMEs) and corporate borrowers who will now be able to contact their banks for assessment and restructuring of their loans based on their respective circumstances arising from the pandemic.

Bank are further expected to meet all the costs related to the extension and restructuring of loans and to facilitate increased use of mobile digital platforms, banks will also be required to waive all charges for balance inquiry.

“As earlier announced, all charges for transfers between mobile money wallets and bank accounts will be eliminated. CBK will closely monitor the implementation of these measures, particularly in light of the fast-evolving nature of the economic impact of the pandemic,” said Njoroge.