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Kenya

Banks expected to fire more employees on increased digital uptake and virus aftermath-CBK

NAIROBI, Kenya, Aug 7- Commercials banks are still planning to trim their workforce in the course of the year, as a result of increased uptake of digital activities and reduced business projects occasioned by the outbreak of the coronavirus disease, fresh data has shown.

The data from the Central Bank of Kenya Monetary Policy Committee survey report for July reveals that 11 percent of Tier 1 lenders revealed that banks could fire staff and expressed reduced optimism compared to May’s sentiments.

22 percent of those surveyed however revealed that they had intended to hire more workers in the sector in March before coronavirus shook the country’s economy.

Chief executive officers for non-banking institutions report having faced the wrath of the pandemic on the containment measures that affected their operations forcing them to cut down their staff numbers to curb the spread of the disease.

However, microfinance, lenders and most medium enterprises said they are likely to maintain the status quo and hold on any lay off plans owing to the lifted travel restrictions that have provided optimism in picking up of the country’s economic activities.

However, the report shows a slowdown in further layoffs, with some respondents indicating that they were keen on taking advantage of new opportunities and the stimulus package offered to local firms, such as motor vehicle assemblers and hotels.

At the same the same time, the hotel sector players during the survey period said they had to shelve their redundancy plans especially after the reopening of domestic flights.

Private sector credit growth is expected to increase this month and remain so for the remainder of the year, on increased demand by businesses following the gradual re-opening of the economy and increased liquidity of the banking system.

However, some respondents indicated that the demand for credit may remain moderate largely due to uncertainties with the rising Covid-19 cases, and credit risk, the report, says the report.

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Central Bank’s July data shows that credit to the private sector grew by 7.61 per cent in the year to June to record Sh2.69 trillion.

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