The Covid-19 pandemic has battered the economy and livelihoods.
As Kenyans face the month of May, many have received reduced salaries, expect lower pay or, worse, no longer have an income. Companies have suspended operations or shut down.
It will take many operating cycles before companies recover and return to financial strength. And equally long before fortunes change for the many who have joined the ranks of the unemployed or underemployed.
But as financiers of a country’s economy, the banking sector will always be looked up to for support during difficult times and for facilitation of post-disaster recovery and growth.
However, while the Covid-19 economic fallout may test the banks to the core, banking was never for the timid or short-sighted.
Which is precisely why, at unprecedented times of crisis such as this, commercial banks must go above and beyond the call of duty if they’re to effectively meet the needs of its customers and communities.
While the relief measures announced by the Central Bank of Kenya (CBK) in March were a step in the right direction, the banking sector must take bolder steps.
For example, consideration should be given to loan forgiveness, where appropriate, and loan restructuring should include meaningful interest rate reductions or even interest waivers.
Banks can similarly exercise their discretion and extend the same forbearance and relief to non-performing loans, especially if this supports a return to performing status.
Banks can equally reassure customers that the expiration of CBK relief measures will not change their commitment to offering constructive and pragmatic solutions.
Throwing the book at struggling customers and communities, the very entities the economy will be reliant upon to rebound, would be self-defeating and disingenuous of the banks.
Banks have long been criticised for being out of touch with the needs and realities of those it serves.
Proactively reaching out to their customer base to determine their needs and help them to weather the rough patch would be welcome.
Solutions need not only come from the banks and regulators — that is, top-down — but can also be customer-, community- or industry-initiated.
Ongoing flexibility from the sector will be critical, not least because recovery will also be uneven.
For the many Kenyans and companies whose livelihoods and revenues are intertwined with the global economy, recovery will be contingent upon a broader global recovery that will, undoubtedly, take longer.
Unrealistic banking sector demands or bureaucratic tendencies during these difficult times, go against the intent and spirit of corporate citizenship.
Banks must continue to prefer to be in the business of money, not owning the personal and company assets of others.
Their balance sheets that disproportionately reflect the latter after the Covid-19 economic crisis would imply failed attempts at legitimately supporting customers in need, not selfish protection of profit and shareholder dividends.
The banking sector must reject financial expediency and neither waver nor dither in providing support to the public it claims to serve and value.
Ms Mutungi is a career international corporate banker and financial services adviser. [email protected]
