Question

Question 4
a) Critically evaluate various loan portfolio measures adopted by the following stakeholders to mitigate against loan delinquency during COVID-19 Pandemic
i. Central Bank 5 marks
ii. Universal Banks 5 marks
b) Discuss the various credit scheme that have been rolled out to rescue countries, businesses and individuals from the negative impact of COVID-19. 15 marks

Answer 1

Loan portfolio measures which has been adopted by various stakeholders in order to counter loan delinquency against covid-19-

A. Central Bank has eased their monetary policy in order to stimulate the demand into the economy and it has lowered the interest rate into the range of almost zero .

Central Bank has also lowered the reserve ratio of various commercial bank and it had allowed them to issue more of their loan in order to counter with the slowing demand.

Central Bank has also entered into open market operations and provided the commercial banks with higher liquidity and liberal policies.

B. Universal banks and the commercial banks are those banks which are regulated by the central bank and they have also prepared a structured response to the covid-19.

These universal bank has cut their interest rates and this has been resulted by the cut in the interest rate during the monetary policy of Central Bank.

The fed fund rates has also help them in order to slash their lending rate in order to stimulate the demand into the overall economy.

They are also provided with more reserve to lend & help their overall profits