Kenya’s central bank stresses on urgency to cushion the small businesses amidst COVID-19

The COVID-19 pandemic and the resultant economic fallout has posited significant challenges on several sectors of the economy in various countries.

On May 28, the head of Kenya’s central bank, that is, the Central Bank of Kenya (CBK) has warned that Kenya’s small and medium enterprises need urgent financial aid to cushion them from the biting effects of the COVID-19 pandemic else they are under the risk of shutting down by end June.

The Central Bank of Kenya Governor, Patrick Njoroge, said, “I wanted to underscore the urgency of… putting in place the credit guarantee scheme… This is extremely urgent. We cannot do this as business as usual.”

On May 27, the Central Bank of Kenya (CBK) said that once a planned credit-guarantee scheme is put in place, the businesses are expected to take advantage of credit made available to them. The CBK on May 27 left its benchmark rate at 7.0%, saying that its accommodative stance remained appropriate.

In order to help the businesses survive in the wake of the pandemic, the Central Bank of Kenya monetary policy committee has also cut its main interest rate by a total of 125 basis points over two meetings to support the economy.

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