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- The waiver of fees on bank-to-M-Pesa transactions has led to heavy loss of revenue for Standard Chartered Bank of Kenya
- The monthly loss of revenue of approximately Sh5 million is mainly due to the measures initiated to ease the financial burden on customers in the wake of the Covid-19
The waiver of fees on bank-to-M-Pesa transactions has led to a heavy loss of revenue for Standard Chartered Bank of Kenya. The monthly loss of revenue of approximately Sh5 million is mainly due to the measures initiated to ease the financial burden on customers in the wake of the Covid-19. This was revealed by chief executive Kariuki Ngari at StanChart’s annual general meeting recently.
Mr Ngari added that the Bank has also restructured loans amounting to 17.5 percent of its total loan book, giving relief to customers whose incomes have dropped due to the pandemic.
Loan facilities worth more than Sh22 billion were restructured and granted an extension to a maximum period of 12 months as well as deferred payment terms. The restructured loans are primarily expected to support the SMEs in agriculture, manufacturing, trade, transport and communication, building and construction, tourism and hospitality etc. Restrictions imposed to curb the virus has created difficulties for borrowers to repay their loans.
The Central Bank of Kenya (CBK) initiated the removal of the charges from March 16, 2020, which met with protests from several banks. Though the waivers were to be discontinued on June 30, 2020, the CBK decided to extend the waivers until December 31, 2020. CBK also pressed for the loan restructuring to bail out households and corporate borrowers from the pressures. It also softened its stand on requirements for loan classification and extended the repayment period.
