Banks’ COVID-19 moratorium for businesses should be extended – Fidelity Bank MD

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Banks’ COVID-19 moratorium for businesses should be extended – Fidelity Bank MD

…as enterprises are still not out of the woods yet

Considering the impact of the pandemic on businesses and the financial sector, it will be prudent for banks to extend the moratorium they gave to enterprises so they can have a breathing space, Managing Director of Fidelity Bank, Julian Kingsley Opuni, has said,

Businesses across all sectors of the economy have experienced some kind of impact from the pandemic, ranging from declines in sales and revenue, increasing cost of operations, staff shortfall as a result of lay-offs, among other negative effects which have made it difficult for many businesses to pay back loans they borrowed from banks in time. Some banks, therefore, responded by giving their customers six months moratorium on their debt, with others even freezing the interest.

In an interview with the B&FT on the sidelines of the 2020 Ghana Economic Forum (GEF), Mr. Opuni said even though the economy seems to be picking up the pieces together, it has still not resulted in a complete recovery for businesses, hence, banks should consider extending the six-month moratorium they extended to these enterprises.

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“One of the key steps that the banking sector took was to act very quickly to the industries that were impacted by the pandemic, especially, with those that had loans which we believed that it would impact on their ability to pay back because their business activities have been stalled.

We started with as far as a projection on how long a period of moratorium you want to grant to some of the companies. In some instances, we actually did interest forgiveness and therefore certain interests that were accrued were forgiven. In other instances, we have to do a restructure of the whole facility and term it out over a long period.

But we have to get close to these businesses and see whether they have recovered and whether they will need additional support, such as extending further these moratoriums. It cannot be extended forever. But we are sensitive to the fact that some of these businesses will bounce back when the pandemic is over. So in the short term, we are going to revisit and have a conversation with these industries and organisations that have been impacted by the pandemic,” he said.

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The Managing Director’s comment on the businesses still going through difficulties due to the pandemic’s impact is supported by a new data from the Ghana Statistical Service (GSS) which indicates that enterprises are yet to fully recover.

According to the report dubbed COVID-19 Rapid Firm Tracker, in August and September, more than 297,088 workers of businesses had their wages reduced compared to 770,124 in May and June. Also, three to four months after the lifting of the restrictions related to the COVID-19 pandemic, 46,000 firms are still either permanently or temporarily closed down relative to the 85,000 recorded in May and June.

Again, the report added, an estimated 11,986 workers lost their jobs in August and September compared to May and June figure of 41,952. Workers in Trade sub-sector were mostly affected.

The post Banks’ COVID-19 moratorium for businesses should be extended – Fidelity Bank MD appeared first on The Business & Financial Times.

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SOURCE: thebftonline.com

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