MORATORIUMUPDATE

Copyright © 2020 Rubix Data Sciences Pvt.Ltd. All rights reserved.

C VID

- Kenya

November 2020

S. No. Country Kenya

1Measures Implemented -

Company FilingsVirtual & Deferred AGMs and Online filing

Action taken as part of the Measure

Targeted audience (e.g. Consumers/ Business/other)

Businesses

AGM: The Capital Markets Authority has allowed issuers of securities to the public and licensed persons including collective investment schemes that were scheduled to hold their annual general meetings in March, April, and May to defer their AGMs to a later date. Issuers & approved persons including collective investment schemes are advised to consider holding virtual AGMs subject to the guidelines of the Authority in the month of June 2020 & July 2020. The Authority has extended the deferral of AGMs for those who may not be able to conduct it within the set time frame to December 31, 2020.

Annual Filing: Under the directives of the Government of Kenya, The Business Registration Service (the BRS) issued a public notice on 26 March 2020 according to which, its services will be offered to businesses and companies so as to allow employees to work from home. They have provided online services for filing annual returns and also maintained a designated a drop-off point where customers can drop off their documents for registration.

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Permanence of Measures (e.g. Temporary or Permanent) - Start Date / End date

Source / Link

https://www.cma.or.ke/index.php?option=com_content&view= article&id=640:cma-issues-guidelines-for-holding-virtual-general-meetings-to-issuers-of-securities-to-the-public&catid=12&Itemid=207

https://brs.go.ke/assets/downloads/updated%20notice.pdf

https://www.africalegalnetwork.com/covidhub/faqs/governance

https://www.cma.or.ke/index.php?option=com_phocadownload& view=category&download=569:guidance-007-2020-deferrral-of-agms-for-issuers-licensed-persons-due-to-covid-19&id=92:corporate-governance-for-issuers&Itemid=285

TemporaryStart DateFor AGM: March 18, 2020For Filing: March 26, 2020End DateFor AGM: December 31, 2020

2Measures Implemented -

Payment / Loan RepaymentsLoan Restructuring & Deferred

Loan Repayment

Action taken as part of the Measure

Targeted audience (e.g. Consumers/ Business/other)

Businesses

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Permanence of Measures (e.g. Temporary or Permanent) - Start Date / End date

TemporaryStart Date: March 18, 2020End Date: March 2, 2021

The Central Bank of Kenya (CBK) has announced a set of measures that commercial banks will undertake in order to alleviate the adverse economic effects their customers may face from the Coronavirus pandemic (COVID-19).

— Banks will meet all the costs related to the extension and restructuring of loans.

— Medium-sized enterprises (SMEs) and corporate borrowers can contact their banks for assessment and restructuring of their loans based on their respective circumstances arising from the pandemic.

— All charges for transfers between mobile money wallets and bank accounts will be eliminated.

— To facilitate increased use of mobile digital platforms, banks will waive all charges for balance inquiry.

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Source / Link

https://www.centralbank.go.ke/uploads/banking_circulars/ 1400484618_Banking%20Circular%20No.%203%20of%202020%20-%20Implementation%20of%20Emergency%20Measures.pdf

https://www.centralbank.go.ke/uploads/press_releases/1908080057 _Press%20Release%20-%20Emergency%20Measures%20to%20Mitigate%20the%20Adverse%20Economic%20Effects%20on%20Bank%20Borrowers%20from%20the%20Coronavirus%20Pandemic.pdf

https://www.capitalfm.co.ke/business/2020/03/repayment-of-personal-loans-extended-by-one-year-as-borrowers-feel-the-heat-of-coronavirus/

3Measures Implemented -

Insolvency

Action taken as part of the Measure

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No Change in Insolvency Law

Targeted audience (e.g. Consumers/ Business/other)

Permanence of Measures (e.g. Temporary or Permanent) - Start Date / End date

Source / Linkhttps://insolvency-covid19.dentons.com/?c%5B%5D=105&c%5B%5D =&c%5B%5D=&k%5B%5D=24&k%5B%5D=25&k%5B%5D=26&k%5B%5D=27&k%5B%5D=32

The Central Bank of Kenya has provided flexibility to banks inrelation to loan classifications. Loans are no longer classed as non-performing if they were performing as at 2 March 2020; or restructured as a result of COVID-19.

Businesses

Temporary

4Measures Implemented -

Fiscal Stimulus

Action taken as part of the Measure

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— The Government included a Ksh56.6 million (0.5 percent of GDP) economic stimulus package that includes a new youth employment scheme, provision of credit guarantees, fast-tracking payment of VAT refunds and other government obligations, increased funding for cash transfers, and several other initiatives.

— The Government, as part of the FY2019/20 budget (ending June 30, 2020), initially earmarked Ksh40 billion (0.4 percent of GDP) for Covid- related expenditure, including health sector (enhanced surveillance,

laboratory services, isolation units, equipment, supplies, and communication); social protection (cash transfers and food relief); and funds for expediting payments of existing obligations to maintain cash flow for businesses during the crisis.

— A package of tax measures has been adopted, including full income tax relief for persons earning below the equivalent of KShs24000 permonth, reduction of the top pay-as you earn rate from 30 to 25 percent, reduction of the base corporate income tax rate from 30 to 25 percent, reduction of the turnover tax rate on small businesses from 3 to 1 percent, and a reduction of the standard VAT rate from 16 to 14 percent.

Targeted audience (e.g. Consumers/ Business/other)

Individuals, Businesses

Permanence of Measures (e.g. Temporary or Permanent) - Start Date / End date

TemporaryStart Date: March 25, 2020

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Source / Link

https://www.bmmusau.com/kenya-covid-19-fiscal-and-tax-measures/

https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#K

5Measures Implemented -

Monetary Stimulus

Action taken as part of the Measure

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— Announced flexibility to banks regarding loan classification and provisioning for loans that were performing on March 2, 2020, but were restructured due to the pandemic.

— On March 25, 2020 the Central Bank lowered its policy rate by 100bps to 7.25 percent. On April 29, the central bank lowered itspolicy rate by 25 bps to 7.0 percent.

— Increased the maximum tenor of repurchase agreements from 28 to 91 days; and

— Lowered banks’ cash reserve ratio by 100 bps to 4.25 percent;

— The central bank has also encouraged banks to extend flexibility to borrowers’ loan terms based on pandemic-related circumstances and encouraged the waiving or reducing of charges on mobile money transactions to disincentivize the use of cash.

— On April 15, the central bank suspended the listing of negative credit information for borrowers whose loans became non- performing after April 1 for six months.

— A new minimum threshold of $10 was set for negative credit information submitted to credit reference bureaus.

Targeted audience (e.g. Consumers/ Business/other)

Individuals, Businesses

Permanence of Measures (e.g. Temporary or Permanent) - Start Date / End date

TemporaryStart Date: March 25, 2020

Source / Link

https://www.bmmusau.com/kenya-covid-19-fiscal-and-tax-measures/

https://www.imf.org/en/Topics/imf-and-covid19/Policy-Responses-to-COVID-19#K

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