SA banks provide over R45bn in Covid-19 financial relief

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South Africa Headlines News

Banks have provided a cumulative R45.56 billion in financial relief and loan guarantees to individuals and businesses that were financially distressed due to Covid-19 and the associated lockdown, the Banking Association of SA said on Monday.

DURBAN – South African banks had, up to August 1, provided a cumulative R45.56 billion in financial relief and loan guarantees to individuals and businesses that were financially distressed due to Covid-19 and the associated lockdown, the Banking Association of South Africa said on Monday.

South Africa entered its level five national lockdown on March 27, and has since eased restrictions to level 3, but the consequences of the initial lockdown on the local economy remain. According to research undertaken by the National Income Dynamics Coronavirus Rapid Mobile Survey last month, an estimated 3 million South Africans had lost their jobs due to the lockdown.

BASA said the period of relief initially extended to some companies and businesses expired from the end of June 2020, but that a number of banks had announced bespoke relief for their customers, according to the banks’ capacity and risk management policies. It said that the Loan Guarantee Scheme provided loans, substantially guaranteed by government, through participating commercial banks to eligible businesses, to help them survive until “new normal” economic activities resumed.

- Bank credit assessments and loan approvals will be more discretionary and less restrictive, although banks will still use reasonable lending practices. This is to protect the fiscus by ensuring that taxpayers’ money is used responsibly.

 

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