Standard Chartered Bank Kenya is closing accounts of small businesses that fail to hit a monthly cash inflow of Sh10 million, a move the ...
Standard Chartered Bank Kenya is closing accounts of small businesses that fail to hit a monthly cash inflow of Sh10 million, a move the institution said has mostly affected inactive clients.
The move has seen affected small and medium-sized enterprises (SMEs) seek banking services at other lenders.
StanChart has this year shut an undisclosed number of SME business accounts, in what some of the businesses that spoke to the Business Daily said was the failure to have cash flows to the tune of Sh10 million through their accounts monthly.
The motive
“I had banked with the bank for more than 15 years where I operated the business and my personal accounts but this year, I was told that the bank would close it since the cash flows were below its limit,” a trader whose business account was closed this month said.
The trader said the bank started the process early this year. But the bank says it has reviewed its portfolio “to identify inactive accounts” in line with its risk and governance protocols, thus the move.
While StanChart has not disclosed the number of businesses affected, it said the exercise applied to a “a small segment of customers.”
A letter from the bank’s head of business banking in the country said the lender was closing accounts based on their “utilisation”.
“A number of the affected accounts are inactive which causes a risk to our clients and the bank,” said the Head of Consumer, Private and Business Banking in Kenya and East Africa, Edith Chumba.
“Before any decision is made, we provide three months of active client engagement and the clients are given a 91-day window to make a decision on the way forward, such as activating their accounts to continue with the relationship.”
She said the bank provides advisory services for the clients’ transition.
By BNN
CC Business Daily
The post STANDARD CHARTERED BANK CLOSES DOWN ACCOUNTS OF SMEs appeared first on BNN.
