Six-month loan moratorium will ease financial strain on businesses affected by floods
Business
By
Nazir Jinnah
| Apr 29, 2024
The government should move with speed and alleviate the suffering of Kenyans affected by the ongoing heavy rains. The latest statistics indicate that more than 100 people have been killed by floods in various parts of the country, and their livelihoods are entirely or severely destroyed.
The floods have wreaked havoc in Kenya's Capital Nairobi, a business hub for East Africa, and has also claimed dozens of lives. Due to the current crisis, the Government has since postponed the opening of primary and secondary schools to May 6.
There has been an outcry among Kenyans over the sluggish manner the Government has handled the crisis even as the weatherman warns of more downpours in the coming days. The government should borrow a leaf from that of Dubai, by introducing relief measures that will alleviate the financial burden of Kenyans affected by the floods.
With key corridor roads rendered impassable, the ripple effect will go beyond human suffering and will also injure the economy. This environmental catastrophe has not only inflicted damage on infrastructure but has also placed significant strain on individuals burdened with loans and debt. As the situation worsens, with forecasts predicting more rainfall until mid-next month, the livelihoods of many residents are hanging in the balance.
One way to alleviate this suffering is for President William Ruto-led Kenya Kwanza administration to issue a loan moratorium of up to six months so that affected businesses and individuals can restructure their financial obligations. This will help them to regain their footing in the aftermath of this disaster.
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In Dubai, the Central Bank has since issued a loan moratorium in response to a similar crisis. The Dubai Central Bank issued a loan moratorium, granting relief to borrowers with car loans and home loans. The Central Bank of Kenya should follow suit and instruct banks to allow for debt restructuring, similar to the proactive measures taken by Dubai authorities.
The impact of the floods extends beyond physical damage, as individuals and families face the daunting task of rebuilding their lives amidst financial uncertainty. With harvesting activities at risk and livelihoods in jeopardy, there is an urgent need for comprehensive support and intervention from the government and financial institutions.