Stanbic gives 3-month loan holiday for SMEs

Stanbic Bank building in Nairobi. SMEs with outstanding loans with the financier have been offered a three-month repayment break. FILE PHOTO | NMG 

By PATRICK ALUSHULA
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Summary

• The offer is effective April 1, meaning that the SMEs will be required to resume repayments in July, offering reprieve to small entities at a time sales have dwindled.
• Stanbic has also instructed large corporate customers to contact it for assessment and restructuring of their loans based on their respective industry circumstances.

Small and medium sized enterprises (SMEs) with outstanding loans at Stanbic Bank Kenya

have been offered a three-month repayment break to cushion them against the economic disruptions caused by the coronavirus pandemic.

The offer is effective April 1, meaning that the SMEs will be required to resume repayments in July, offering reprieve to small entities at a time sales have dwindled.

Stanbic has also instructed large corporate customers to contact it for assessment and restructuring of their loans based on their respective industry circumstances.

Kenya had 42 confirmed coronavirus cases by Sunday and 1,426 people are being monitored for the disease that has spread to at least 177 countries and territories.

The Stanbic move comes after government last week cut turnover tax from three percent to one percent. Local companies also saw their corporate tax cut from 30 percent to 25 percent.

“The reality is that SMEs are going through a tough period. We are therefore committed to unlocking new solutions to allow them to continue to run their businesses efficiently.

“We must keep Kenya moving,” Stanbic Bank CEO Charles Mudiwa said.

The lender did not give specific breakdown on the size of loan book that relates to the SMEs.

The bank’s loan book grew by four percent to Sh152.8 billion last year with 21 percent and 10 percent relating to manufacturing sector and agriculture sector respectively. Net profit grew by two percent to Sh6.3 billon during this period.

The lender becomes the first to offer a definite period within which SMEs will not be required to service their loans.

Central Bank of Kenya (CBK) recently directed SMEs to contact their banks for assessment and restructuring of loans based on their circumstances.

This means it will be up to individual bank’s assessment to decide on the length of time to spare SME customers from paying loans.

Absa Kenya said it will provide options for customers to either restructure their loans by reducing their monthly instalments over a period of up to one year, or take a “short-term repayment holiday”.

The Central Bank of Kenya agreed with all banks that they extend repayment period for personal loans by up to one year to offer relief to borrowers.