Tito Mboweni: Covid-19 Loan Guarantee Scheme to include business restart option
DURBAN - The Covid-19 Loan Guarantee Scheme for businesses will now also include a business restart option, Finance Minister Tito Mboweni said while tabling his adjusted Budget on Wednesday.
Mboweni highlighted the progress of the Covid-19 Loan Guarantee Scheme informing government that the loan guarantee scheme is expanding rapidly.
"In its first month, the scheme lent over R10 billion. Many more applications are being processed, and lending is expected to rise significantly," said Mboweni.
He added: "Now that we have moved to an advanced Level 3, most of the economy is open for business. We must help businesses to get moving. The loan guarantee scheme now also includes a business restart option, for businesses who need support to get up and going after the lockdown. This will apply to all businesses including those with turnover of more than R300 million".
The Minister also announced that government is in the process of finalising amendments to the repayment holiday and turnover limit, and relaxing terms and conditions to support lending. The South African Reserve Bank and the commercial banks are finalising the revised legal arrangements and will make announcements shortly.
Mboweni also said that work is also continuing to expand the scheme to non‐bank lenders.
According to the Banking Association of South Africa, South African banks have approved just over R7 billion in loans for 4 800 qualifying small businesses, since the Covid-19 Loan Guarantee Scheme was launched in mid-May. This amount is expected to grow as the number of applications for loans continues to increase.
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