Mobile lenders join race to offer loan repayment holidays to customers
Mobile-based lending institutions have joined the race to offer loan repayment holidays to customers after some banks made a similar move last week.
The Central Bank had last month directed SMEs to contact banks for assessment and restructuring of loans based on their circumstances – in a swift move that saw the likes of Stanbic Bank and Absa Kenya, formally Barclays, among other lenders activate such plans with the former offering a three-month moratorium to its customers.
More lending institutions are expected to do the same.
Effective April 1, loan apps under the association Digital Lenders Association (DLAK), which represents 17 major digital lenders, agreed to waive the late repayment fees as part of the measures to support customers during the pandemic.
“The move will cushion customers who are under distress, following the slowdown in the economy after disruptions to their day to day operations that could have had an effect on regular income flow.
Customers are advised to seek more detailed information on the specific aspects of the waiver from their respective providers,” DLAK said in a statement Monday.
A loan repayment holiday, known as a moratorium, is a legal authoridation to debtors by a lending institution to postpone payment at an agreed later date.
Availing a moratorium will ordinarily not entail any change in the existing terms and conditions of the loan.
If the existing terms and conditions of the loan contain charges or conditions related to a moratorium, then these may apply depending on the repayment freeze policy by the lending institution.
Last month, President Uhuru Kenyatta issued a directive on the temporary suspension of the listing with Credit Reference Bureaus (CRB) of any person, micro, small and medium enterprises (MSMEs) and corporate entities whose loan account falls overdue or is in arrears, effective 1st April 2020.