Durban - In light of the outbreak and now spread of Covid-19 within South Africa, the Democratic Alliance in KwaZulu-Natal has proposed that municipalities and financial institutions allow their clients a four month grace period in which they will not pay their bills and loans.
Zwakele Mncwango, the party’s leader in the province, said that this would allow individual customers and businesses a bit of financial relief as some people could possibly not earn at all or not earn enough during this period to afford paying.
He said with the virus outbreak and people being encouraged not to travel and instead to stay at home, it was a challenge for most working people to remain at home because they were forced by financial circumstances to go to work or to run their businesses.
“If people don’t go to work, they won’t be able to make money to pay their debts and monthly liabilities and it is the same with businesses. If a business closes today it means that rent for the business’s premises won’t be paid and there will be an inability to service the bonds taken to run the business,” Mncwango said.
He said that with working people and businesses liable to pay rates, services like water and electricity, levies and rent it needed all stakeholders to come on board and support a loan payment deferment holiday of at least four months for all loans and utility bills.
He said that this made things even more difficult because a lot of local businesses were run on credit instead of cash meaning that a business shutting its doors in order to comply with safety measures around the virus puts it at great risk of collapse if banks and municipalities do not implement financial relief measures.
On Sunday, Standard Bank announced a three month payment holiday for South African small business owners and students amid the Covid-19 outbreak, but Mncwango said that this was not enough and instead this should apply to everyone who has a loan with a bank.
He said that they were calling for all the banks, not just one bank, to suspend repayments on loans and bonds to individuals and businesses for a period of just four months or until such a time that it can be confidently said that the coronavirus has been dealt with or until a time when everything gets back to business as usual.
“I want to emphasise that the risk factor is too high for financial institutions if they do not suspend the repayment of loans and bonds because it’s better to lose revenue now than forever.
“At least with our proposal, they will lose a few billions in the short term but they will then make more in the long term. This must apply to individual customers and businesses,” Mncwango said.
Political Bureau
* For the latest on the Covid-19 outbreak visit IOL's
.
** If you think you have been exposed to the Covid-19 virus, please call the 24-hour hotline on 0800 029 999