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South African banks approve more than R30.6bn in Covid-19 relief

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South African banks approve more than R30.6bn in Covid-19 relief

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7th July 2020

By: African News Agency

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Local banks have so far approved more than R30.6-billion in relief to individuals and businesses affected by the Covid-19 pandemic and the national lockdown imposed in response, the Banking Association South Africa said on Tuesday.

In addition, over R10.6-billion has been extended to distressed businesses under a Covid-19 loan guarantee scheme.

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"Cash flow relief for eligible individuals and businesses is critical to the preservation of jobs and businesses and to maintaining a functioning economy,” BASA managing director Bongiwe Kunene said.

"Banks hold in trust the salaries and savings of South Africa’s workers, professionals and businesses. It is therefore essential that we continue to extend credit responsibly and avoid blanket debt write-offs or any other actions that might place depositors’ funds at risk or otherwise undermine the integrity of the financial sector.”

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As at June 27, individual customers had received R18.26-billion in relief, with banks approving 82.7 percent of applications for assistance, or 2.4-million out of 2.9-million.

Relief to commercial, small and medium enterprises amounted to R12.39-billion, with 95.5 percent of 138 675 applications being successful, BASA said.

It said banks had also approved just over R10.6-billion in concessionary loans for 7 496 qualifying small businesses in terms of the loan guarantee scheme launched in mid-May.

The scheme is a commercial arrangement which gives borrowers access to business-critical funding at low interest rates and preferential repayment terms.

Similarly, the relief measures granted by banks are intended not as debt write-offs, but rather as a relaxation of repayment terms to assist otherwise viable businesses to remain solvent and continue to pay suppliers and employees during the crisis.

BASA said banks were currently working with the National Treasury and the South African Reserve Bank to review the criteria for the Covid-19 relief scheme to make loans more accessible to distressed businesses.

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