A survey from the Central Bank of Kenya (CBK) reveals that about 75 percent of small and medium businesses in the country will face collapse if they do not get fresh funds from Banks or equity partners by the end of June.
Impacts of social distancing, the curfew, and the closure of businesses like restaurants and bars have largely influenced consumer spending, job cuts, and unpaid leaves as firms try to cut costs.
“There was a survey done at the end of April, and that survey indicated that three quarters (SMEs) do not have cash beyond two months. That means by the end of June, three-quarters of the SMEs are already on the ropes and will be gone because they do not have the cash to keep the lights on,” CBK Governor Dr Njoroge said.
The country has so far recorded over 1600 cases of covid-19. And to limit the spread, the government has suspended commercial flights among other measures which have seen businesses struggle in the falling economy.
“Most businesses would like financial support from the government in the form of grants or cheap, accessible loans to help them pay salaries,” Chief executive of Kenya Private Sector Alliance (Kepsa), Karole Karuga.