Corporates have turned to painful decisions to sacrifice profits in fight against the deadly coronavirus that has hurt business environment and thrown the country into panic.
Firms are increasingly heeding to state’s plea— to not profit from the dire situation but instead unite with citizens in fighting the health crisis that is increasingly morphing into a financial crisis.
Insurers, banks, telecommunications firms, supermarkets and firms in transport sector have led in making business decisions to support government’s efforts to combat the virus, amid fear that revenues will be hurt sparking job cuts.
However, it is also a means of self-preservation since they stand to lose a lot if customers cannot afford their services in the wake of the financial drain occasioned by the virus.
President Uhuru Kenyatta last week commended the business community for its efforts while warning rogue traders not to hike prices of goods and services for higher returns.
“Do your business .Do it right and justly. It is highly immoral if we take advantage of an unfortunate situation to make super profits,” he said.
Competition Authority of Kenya ordered Cleanshelf Supermarkets to refund customers after the retailer raised the prices of specific hand sanitizers by Sh200 as demand rose sharply on discovery of the first coronavirus case in Kenya.
Firms have since then tweaked their business models, sacrificing profits in hope that the virus will not get out of hand and force the country into total lockdown as is the case in Italy.
Many companies have opted to allow part of their staff work from home, an unpopular decision that comes with increased costs of communication and no guarantee of getting the best productivity from workers.
This is with hope that they will lower the risk of their workers fuelling the spread of the virus.
“If we follow these rules, at least they can continue earning income, even though reduced, as opposed to earning nothing as is in other countries. No one is going to make the profits they made last year,” said Health Sectretary Mutahi Kagwe.
Medical insurers made U-turn on footing bills for policy holders who contract the deadly corona virus, hours after the first case was reported in Kenya.
By standard insurance practice, insurers do not cover diseases that are declared as pandemics because such can cause very high claims and drive them out of business. However, insurers have gone against the grain and taken the risk.
“The public is hereby assured that the insurance companies will continue to provide their services to policy holders affected or infected with the virus,” said Insurance Regulatory Authority.
The regulator said the special window was granted in order to support of the government’s mitigation measures and minimise exposure to medical policy holders and beneficiaries.
Banks and telcos have also united to drive cashless transactions by waiving transaction fees on various products.
Payment service providers and commercial banks have frozen charges for transfers between mobile money wallets and bank accounts.
Safaricom has made all transfers of Sh1,000 and below to be free while Airtel Kenya has waived the transaction fees across all bands on its mobile money service.
Banks generate billions of shillings from such transactions apart from the interest income they earn from loaning out money. The decision, which stays for 90 days, will therefore hit their non-interest income.
Cashless payments are expected to cut down on the handling of cash and the risk of the virus being transmitted from person to person. Kenya has confirmed seven cases of the virus by Thursday.
Banks have also committed to restructure personal loans and extend payment periods by up to one month at an additional costs. This is a departure from the normal practice where extending repayment makes the facility more costly.
“We assure all customers that banks will work with you to reschedule or consider moratorium for the periods they will not be in a position to pay loans as a result of this pandemic,” said KCB chief executive Joshua Oigara.
KCB has further partnered with Safaricom to lend out Sh30 billion through mobile phones. This has also been opened for customers who are listed on credit reference bureaus for previous default on payment.
Absa Kenya has gone a step higher by committing to pay all small and medium enterprises supplier invoices within 14 days, with those of Sh1 million and below being paid within a week.
“This should go a long way in helping these businesses maintain their cash flow and working capital,” said Absa Kenya CEO Jeremy Awori.
Supermarkets, synonymous with long queues of shoppers especially in the evening, have had to contend with state directive that they observe social distancing by limiting customers in their premises.
Tuskys supermarket has partnered with Sendy, a logistics company that will see customers order goods online from the retail chain. The goods will then be delivered at their doorsteps.
Having many customers inside a supermarket is usually a good sight for any business but they will now content with having to control the number of shoppers by stretching into a 24 hour service.
Public transport vehicles, known by many to be chaotic and disorderly have had to also make adjustments to their business. Many have been providing hand sanitizers for free.
In addition, they have been ordered by state to reduce the number of passengers, an unpopular directive for an industry synonymous with overloading.
All 14-seater matatus were last Friday directed to carry not more than eight passengers while those with 25 seats will not exceed 15 passengers. The rest will also not fill more than 60 percent of their sitting capacity.
The directive means that they will be foregoing revenues of between 40 percent and 50 percent for every trip made. They are also required to disinfect the vehicles after every trip.
Some businesses have felt the full impact of the virus. Mandera and Wajir counties have for instance temporarily banned the sale and transportation of miraa to prevent possible spread of the novel coronavirus.
Places of entertainment like night clubs have also had to content with the order of shutting their premises at 7.30 pm as opposed to operating the whole night as is their norm.
Citizens have also had to sacrifice their right to assemble and socialise. Places such as western Kenya have been forced to bend their elaborate burial rites in order to minimize spread of the virus.
Several county governments, including Kakamega, have ordered all morgues closed and families directed to bury their loved ones. Subsequent deaths are now supposed to be followed by burial as quickly as possible.