The Central Bank of Kenya (CBK), in April alone, granted approvals to 11 commercial banks and one microfinance institution to access KSh17.59 Billion in cash and deposits held in its reserves.
The Monetary Policy Committee (MPC) resulted to lowering the Cash Reserve Ratio (CRR) for commercial banks to 4.25% from 5.25% on March 23rd, 2020.
Records indicate that 50% of the KSh35.2 Billion had been used in April alone.
“With 50% having been used in just one-month, this depicts the increased demand for funding from the banking sector,” said Dr. Patrick Njoroge, CBK Governor. The Governor stated this before the Senate Ad Hoc Committee while issuing an update on the COVID19 situation in the country.
“In general, the banking sector has started to feel the adverse impact of COVID-19 as a result of the slowdown in most economic sectors. Requests for extension of personal loans and restructuring of other sectors loans are expected to ramp up in the coming months if the pandemic continues to penetrate,” He added.
The seven lending institutions managed to restructure loans amounting to Ksh176 billion in April.
Speaking during the presentation, Dr. Njororge said that the small businesses hadn’t been left behind as he is working with the banks, Government and development partners to ensure funds are easily accessible during and after the pandemic.