Covid-19: Kalonzo wants banks to consider 3 to 6 months moratorium on loans

Wednesday, March 18th, 2020 16:45 | By
Wiper Party leader Kalonzo Musyoka. Photo/PD/Gerald Ithana

Wiper Party Leader Kalonzo Musyoka has proposed that financial institutions and digital money lenders should consider a three to six-month moratorium on loan and mortgage payments.

In a statement to newsrooms on Wednesday, Musyoka said companies as well as small and medium enterprises (SMEs) are facing dire financial straits owing to an unprecedented crisis wrought by the coronavirus pandemic.

He has also asked employers to avoid sacking their employees at this time but consider alternatives such as giving unpaid leave.

“History has proven that, during such moments of crises, the most obvious recourse taken by employers is effecting of mass lay-offs. I urge employers to avoid sacking their workers at this time, and to consider alternatives such as giving unpaid leave,” the Wiper Party leader said.

“Every company or SME should come up with alternative mitigation measures other than complete shutdowns,” he advised.

In a statement dubbed “grappling with an unprecedented crisis wrought by the coronavirus pandemic”, Musyokaurged government to consider giving incentives to companies to mitigate the tough economic times.

“Such measures may include giving tax breaks for between the next three to six months, so as to enable the companies to ride over the turbulence,” Musyoka said in the statement.

He added: “I am aware that, even without the painful consequences wrought by coronavirus, most Kenyans are caught up in a debt cycle.”

Kalonzo, a one-time Vice President has also recommended to the National Treasury Cabinet Secretary Ukur Yattani to call for a consultative meeting with the lending institutions to discuss ways of cushioning the financial institutions from financial aftershocks.

In the last couple of years, he disclosed financial institutions have been reporting a huge spillover of non-performing loans. Yet, this situation, according to him, is not as a result of deliberate refusal by Kenyans to honour their financial obligations, but rather due to inability to pay due to harsh economic times.

“Coronavirus has just made a bad situation much worse!” He held.

He labelled COVID-19 an international scourge threatening to penetrate the heart of the country’s very existence.

Apart from the grave health risks posed by coronavirus, Kalonzo explained, the pandemic threatens our socio-economic well-being.

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