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 from one country to another, affecting the world economy, including the banking business.
The following are the effects of COVID-19 on the banking business in Tanzania.
Reduction of deposits: in the banking business, banks use their customer’s deposits to provide loans and credit to others so that when they return, they return with interest and get profit through it. 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 their homes, so to survive, they have to use their savings, including stopping deposits and just using their cash-in-hand savings.
Due to the increase in expenses due to the spread of the disease, the banks, as places where many people came and went, have been taking measures to prevent the spread of the disease between customers and their employees. These measures’ costs weren’t in the budget in the first place, but for the safety of the people, they had to be implemented.
Interference of banker and customer contract. There are contractual agreements between customers and bankers, but due to COVID-19, some of those agreed clauses have been hard 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 when the time required, but the customer has failed because of getting sick and being forced to quarantine, and the bank can’t sue him for it because that is a global problem.
All in all, COVID-19 has affected our country in so many ways, especially the economy during 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.
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