Thousands of Kenyans are already feeling hard pressed after banks began deducting interests, fines and even loans following the expiry of the one-year waiver period instituted by commercial banks sometime in April in 2020.
Commercial banks will be aiming to recover Ksh1.6 trillion worth of restructured loans after resuming the deductions. This means that all the loans that had benefited from the waiver will be subjected to interest rates that were in force even before the pandemic struck in March.
The waivers were introduced earlier last year to cushion customers during the Covid-19 pandemic since many Kenyans lost jobs or had were subjected to pay-cuts.
The debt relief measures instituted by local banks saw loans get restructured, loan tenures extended and credit lines expanded to keep Kenyans afloat at a time when the country was adversely affected by the Covid-19 pandemic.
However, thousands of beneficiaries on March 1, 2021, received messages informing them that money had been deducted from their accounts to repay bank loans.
"I received a call a few days ago informing me that the deductions would resume normally. The call shocked me because my company still exercises the 25 percent pay cut," a source who only identified himself as James told Kenyans.co.ke.
James was not the only Kenyan left with a negative balance in their bank accounts.
A journalist in one of the leading media houses told Kenyans.co.ke that he was shocked when he received his payslip. A significant amount had been deducted and paid towards his bank loan despite the fact that he is only paid a percentage of his salary - and there are no signs that the employer will be paying him his full salary anytime soon.
One George Opiyo told People Daily that his salary was hived off despite having been in talks with the bank.
“I was waiting to sign this letter to extend the waiver, and which they have been holding, only for them to take money from my account. They swept all the money in my account to pay fines and interest,” George Opiyo said.
Speaking to the People Daily, a Kenyan who asked not to mentioned, said that his employer reduced his salary by 50 percent. He added that he negotiated with his bank on his loan repayment terms.
“When I went to negotiate for friendly terms last year, the bank agreed to put on hold my payments, but right now my account is in the negative. I do not have any money now,” he recounted.
Kenyan banks allowed their customers to apply for loan holidays due to the economic effects caused by Covid-19.
The Central Bank of Kenya retained its key interest rate steady at 7% during its January 2021 meeting. The committee noted that that the current monetary policy stance remains appropriate given the prevailing circumstances.
