StanChart reveals loss from free M-Pesa deals


StanChart chief executive Kariuki Ngari. FILE PHOTO | NMG

Standard Chartered Bank of Kenya #ticker:SCBK is losing Sh5 million of revenue monthly from the waiver of fees on bank-to-M-Pesa transactions as part of measures to ease the financial burden on customers in the wake of the Covid-19 pandemic.

Removal of the charges were initiated by the Central Bank of Kenya (CBK) and were to last from March 16, 2020 until June 30, 2020.

The CBK later made a unilateral decision to extend the waivers until December 31, 2020, drawing protests from Safaricom and banks.

StanChart’s revenue loss from the waivers was disclosed by chief executive Kariuki Ngari at the bank’s annual general meeting held on Friday last week via electronic means.

He added that the lender has also restructured loans amounting to 17.5 percent of its total loan book, giving relief to customers whose incomes have dropped due to the pandemic.

“To date, we have restructured loan facilities worth more than Sh22 billion over varying extension periods to a maximum period of 12 months as well as providing deferred payment terms,” Mr Ngari said.

“These restructured loans are supporting the SMEs in diverse fields of agriculture, manufacturing, trade, transport and communication, building and construction, tourism and hospitality industries in the country.”

The disease and measures taken to contain its spread including travel restrictions and closure of schools and bars have made it difficult for borrowers to repay their loans.

The loan restructuring was also brokered by CBK after it became clear that many households and corporate borrowers would struggle to meet their obligations. To soften the blow on the lenders, the CBK said it will be more flexible with regard to requirements for loan classification and provisioning for loans that were performing on March 2, 2020 and whose repayment period was extended or were restructured due to the pandemic.