KIU, Western Campus - The annual Bank Analysis Report for 2020 has noted that the national lockdown imposed by the government following the onset of the COVID-19 pandemic has had a drastic effect on the services sector, which is a major economic driver.
The report, which was authored by Summit Consulting, says that the most affected sectors are accommodation and food service, tourism, insurance and financial services, especially in the second quarter of 2020.
The 365-page report says that this drop in revenues from services led to a corresponding 2.55% drop in GDP, with a 4.07% negative impact on accommodation and food service alone.
The report also says that mobile money continues to threaten the financial sector, with its balances rising 23.63% from 944 billion to 1.1 trillion in 2019 mainly because a high volume of customers prefer to transact with mobile money other than depositing in banks due to convenience.
This, the report says, has greatly affected the profitability of banks despite them partnering with telecom companies to offer faster financial services to customers.