By Greenford R Chinjeru – Art in Tanzania internship
COVID-19 is a dangerous and deadly virus infection that has killed many people and affected the global economy. The disease has restricted the movement of people and goods between countries, affecting the global economy, including the banking sector.
The following are the effects of COVID-19 on the banking business in Tanzania.
Reduction of deposits: In the banking business, banks use their customers’ deposits to provide loans and credit to others, so that when these deposits are repaid, they return with interest, generating a profit. However, due to COVID-19, the number of people who deposit their money has decreased. This is because people have been advised to stay at home, so to survive, they have to use their savings, including stopping deposits and relying on their cash-in-hand savings.
Due to the increase in expenses resulting from the spread of the disease, banks, which are places where many people come and go, have been taking measures to prevent the spread of the disease between customers and their employees. These measures weren’t initially in place, but for the safety of the people, they had to be implemented.
Interference of the banker and the customer contract. There are contractual agreements between customers and bankers; however, due to COVID-19, some of the agreed-upon clauses have been challenging to implement to safeguard the health of all parties. There have been times when a customer has had an obligation to return the loan to the bank at the required time, but the customer has failed due to illness and being forced to quarantine, and the bank can’t sue because that is a global problem.
All in all, COVID-19 has had a profound impact on our country, particularly on the economy during the quarantine. The government had to use its revenue to help people who were infected and purchase medical machines to ensure the safety of the people and the country.
