Coronavirus: Banks are getting it right
The COVID-19 crisis struck the country like a robber at night. No one foresaw the economic onslaught, let alone the huge disruption to our daily lives that these pandemic has unleashed so far.
For corporates, the outbreak is causing major disruptions enough to make bosses the world over uneasy.
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Businesses have slowed down operations, employees are being ordered to work from home. All over sudden, hand washing has become as sacred as reporting to work on a Monday morning.
The government is increasingly turning to very serious quarantine tactics, but the virus must be stopped at any cost. Public sentiment has generally been in support of these measures.
Details of what is to come remain largely opaque, but the pragmatic approaches that banks have taken to shield customers from an impending financial onslaught are quite encouraging.
Equity Bank, for instance, is betting on its dynamic array of digital banking platforms to relieve some of the potential pain that small businesses will go through if and when worse comes to worst.
In a statement seen by Maudhui House, Equity said it will now disburse all short term personal and microloans digitally. Its EazzyBiz channel will particularly serve SME customers who take up nearly 70 percent of the lender’s entire loan book.
The Bank has also lifted all transfer fees for Mobile Banking, Card and Pesa-link related transactions up to June 30th. This waiver echoes the Central Bank’s sentiments about the need to embrace cashless transactions to curb the spread of COVID-19.
“While the immediate objective is to reduce the risk of transmission of COVID -19 (Coronavirus) through handling of banknotes, this will also reduce the use of cash in the economy over the medium term” a statement from the CBK reads.
With that in mind, the COVID-19 crisis, therefore, presents a chance to experiment with new and efficient ways of making financial transactions of any size –and to question the wisdom of old cash handling habits.
Equity’s contactless credit and debit cards will, for instance, enable a cardholder to transact on ‘tap and go’ thus reducing contact and handling of Point of Sale (POS) terminals.
Dr. James Mwangi, Equity’s boss says that the lender wants to transform banking from ‘a place you go’ to ‘something you do’ on the palm of your hand.
While digitization continues to be a top priority for the Bank anyway, the COVID-19 crisis will likely catalyze efficiency and may act as a launchpad for testing new ideas that may birth remarkable innovations that can be maintained after the pandemic.
Governor Patrick Njoroge also said that the Central Bank had reached a deal with commercial banks to implement measures that will cushion vulnerable customers and small businesses from the horrifying economic impacts of the pandemic.
Commercial banks among them Stanbic, Standard Chartered, Equity, KCB and Absa Bank have now sought to provide relief to borrowers with existing loan facilities based on individual merit and circumstances arising from the pandemic.
“All loans that were current on March 2ndwill be eligible for this consideration. Banks will review request by borrowers to extend their loans for a period of up to one year” said Dr. Njoroge
He was speaking during a televised speech at State House Nairobi on March 18th. Among those present, was President Uhuru Kenyatta and various Commercial bank bosses.