Customers can reduce their instalments for a limited period or take a payment break, but the interest and fees on loans will accumulate and have to be paid, which might result in an extension of the term of the loan, incurring higher costs. Photo: Supplied
Customers can reduce their instalments for a limited period or take a payment break, but the interest and fees on loans will accumulate and have to be paid, which might result in an extension of the term of the loan, incurring higher costs. Photo: Supplied

Covid-19: Banks grant R7.74bn in relief to customers

By Philippa Larkin Time of article published May 4, 2020

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JOHANNESBURG - Banks provided R7.74 billion in cash-flow relief to their financially distressed customers from March 16 to April 25, the Banking Association South Africa (Basa) said at the weekend. This relief was continuing. 

Basa said the relief measures granted by banks did not envisage debt write-offs, but leniency in terms of the repayment of loans for a period. 

“Banks understand that the Covid-19 pandemic lockdown has increased the financial stress of many of their customers through no fault of their own, and are working hard to provide customers with support in this difficult time,” Basa said.

Basa said it had provided cash-flow relief, including payment breaks, to commercial, small and medium enterprises worth R7.29bn.

Of the more than 1 200 000 individuals who applied for some form of relief, more than 852 000 had received assistance, and applications were constantly being assessed, Basa said. 

The organisation said that of the 90 000 commercial, small and medium enterprises that applied for some form of relief, more than 75 000 had already received payment.

“These numbers are likely to increase significantly over the coming period as more relief is approved. Basa will continue to aggregate and publish this data across the industry from time to time to demonstrate the significant role our members are playing to help their customers and the economy in these challenging times,” Basa said. 

It said relief measures might differ between banks, but were available to customers in good standing who could not meet their credit-agreement payments in the short term as a result of the impact of the Covid19 pandemic and lockdown, and who would most likely be able to meet their obligations again after the relief period.

However, it warned that due to the volume of calls received, reduced staff levels, social distancing and other requirements to which banks had to adhere, bank channels would experience delays. 

“This is being addressed by the banks, but we ask customers to understand the circumstances in which banks’ staff are operating in the present environment. Call centre numbers for some Basa members, as well as their websites, are available at banking.org.za,” Basa said. 

It said although customers could reduce the instalments for a limited period or take a payment break, the interest and fees on loans would accumulate and have to be paid, which might result in an extension of the term of the loan, incurring higher costs.

Customers in debt review should contact their debt counsellor, who would motivate a new repayment proposal to the bank, which would be considered case-by-case, Basa said. 
Small businesses in business rescue should contact their business rescue practitioners, it said.

BUSINESS REPORT 

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