• Sabi Sabi

    Photo credit by Sabi Sabi Game Reseve, Kruger National Park, South Africa

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    Photo credit by Amakhala Game Reserve, Eastern Cape, South Africa

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    Photo credit by !Khwa ttu San Culture and Education Centre, Western Cape, South Africa

  • Amakhala

    Amakhala Game Reserve, Eastern Cape, South Africa

Bank closure in Kenya impacting tourism


Someone within Imperial Bank, now under statutory management by the Central Bank of Kenya as well as the Bank of Uganda, was clearly not looking out for the clients’ interest, contrary to the slogan the bank marketers peddled to get business into their books.

Being put under Central Bank management and direct supervision is often the precursor for a bank closure though there have been rare cases that the respective banks have reopened, albeit with a massively shrunk clients base following the loss of trust and confidence.

While protection schemes are in place in both Uganda and Kenya, clients with current accounts will not have access to their funds and their own liquidity and ability to pay bills and staff will be severely impacted.

From a recent visit to Malindi and Watamu, it is clear that even tourism businesses, hotels, resorts, and fishing operations, are affected and leaving their management in a lurch on how to cope with the sudden lack of access to their cash reserves.

At least in two known cases, owners and managers have opted out of attending the ongoing Magical Kenya Travel Expo in person to deal with this crisis of confidence and lack of cash, showing how serious a matter it is when a bank slides into a financial quagmire and is unable to free itself from the often self-made problems of overextending and holding non-performing loan portfolios for too long.

Best of luck to those affected and known to this correspondent to find a bridging solution until the respective Central Banks will permit the rescue fund operator to begin paying out some money, although there is a cap on it, likely making businesses have to write off major sums.

Source: Prof. Wolfgang H. Thome, Ph.D., eTN Africa Correspondent

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