A SOWETO businessman who initially took a R5.5 million loan to fund his supermarket franchise in Naledi and repaid half the amount in record time now finds himself in a difficult situation.
The bank bluntly refused to restructure his loan and has even threatened to close his business accounts.
It is not unusual for banks to assist model clients by either increasing the repayment term or reducing the amount.
This is exactly what Linda Ndebele routinely asked for but Nedbank, the funders of his business, Pilgrims Corner, refused to accede to his request.
“I acquired a business loan from Nedbank in 2020. I had a franchise agreement with Pick n Pay. However, when Pick n Pay decided to terminate the agreement upon realising that their business model and business plan that they drafted and presented to the bank was neither sustainable nor profitable, my troubles started,” Ndebele said.
“My loan amount was R5.5m. That was my setup cost for the business and I’ve managed to reduce the loan amount to R2.5m. I am now unable to make full repayment terms of R78 000 per month due to the franchise termination.
“I have since then requested meetings with the Nedbank accounts department and I raised all my concerns and they still refused to restructure the loan. I’ve requested another meeting whereby Nedbank requested my financial projection and indeed I sent them to indicate my inability (to pay) but still they are not willing to restructure.
“I don't want to be in a situation where I default on my monthly premium and collapse the business in the process,” Ndebele said.
Now the bank has gone one step further. They are threatening to close his Pilgrims Corner business account and that of his other store in Pimville, Linda’s Market.
Ndebele financed Linda’s Market out of his own pocket. It was never part of the Pick n Pay franchise.
In the eventuality that his business accounts are closed, it would virtually put Ndebele out of business. Based on his repayment history, one would be forgiven to think Ndebele would be treated with a semblance of leniency by the bank.
But that doesn’t seem likely.
An assurance from Vernon Scheepers of Nedbank to Ndebele has still not materialised: “Kindly be advised that our Business Banking Management confirmed that they are attending to your request. They confirmed that they have requested you to provide documents.”
He furnished them with the documents but still the bank won’t hear his plea.
A forward planner, when he is not able to pay, he informs the bank. He says in one email: “Kindly reverse the Nedbank debit order on Ndelindza account as we don't have money to honour it.”
Ndelindza is the Pilgrims Corner business account.
“We did indicate to (bank official) Marius (Lourens) that we won't be able to afford monthly repayments unless he restructures the loan and he refused. Therefore, we are in a position where we can’t afford,” he says in another email to the bank.
All of which fell on deaf ears.
When reached Nedbank, through strategic communications manager Refilwe Boikanyo said: “Due to banker-client confidentiality, Nedbank is not at liberty to answer the questions posed. We are however able to assist by providing you with a holistic overview of our approach.”
Boikanyo said said Nedbank had a comprehensive process to assist and rehabilitate clients, prior to termination of banking relationships or closure of accounts.
“This process affords clients the opportunity to make representations to the bank, which are always duly considered. Nedbank has robust policies and is subject to regulatory requirements within the National Credit Act and other legislations, as such Nedbank applies diligent principles and considers each unique circumstance when determining whether to extend or decline further facilities to a client.
“Under these circumstances we have adequately balanced our mandate to be responsible corporate citizens with Nedbank’s purpose of using financial expertise to do good by assisting the client as far as we can,” she said.
Ndebele is not the only former Pick n Pay township franchise owner in a spot of bother with Nedbank.
Gordon Mazibuko, runs Joy Market in Daveyton, Ekurhuleni, has not escaped the ire of the bank, either.
A letter addressed to him by Marius Lourens reads: “The account is in excess this morning and we accordingly returned the Medium Term Loan (MTL) debits. As advised per our last discussion, we now have no alternative but to issue Letters of Demand.
“Kindly note that as advised previously, this means that we will also be calling up the overdraft facility and cancelling the R200 000 overdraft limit on expiry of the call up letter. A closure letter will also be forwarded relating to the other business account currently being conducted on a creditor basis.”
Mazibuko insisted he had a good history servicing his debt with Nedbank.
He said to Lourens in one email: “For the excess, this is the reason we came asking for help. Even during the payment holiday, [we still paid] but seemingly the bank is not willing to help.
“We approached you as the bank way earlier because we knew we would run into these challenges and unfortunately no help [was forthcoming] from your side. We are in a dire situation – worse now with load shedding going at times about 24 hours with no electricity and the store running on a generator.
“We have been paying full instalments from day one of our loan and we were never afforded the 6 months of just interest payments but now, asking for assistance from you as the bank, is proving futile. No help is coming forth.
“We trust that as a bank you will still reconsider and relook at ways you can assist us during these trying times.”
Ndebele now finds that the bank has taken to returning his debit orders, even when there is money in his business accounts.
He fired off another email to Lourens: “I don't want to go back and forth with you. As you correctly put it, last month I said to (bank official) Hlengiwe in writing to return the MTL debit and I stated my reasons why I sought this.
“I, therefore, have never requested you to return MTL. As a reasonable person, you were supposed to verify with me first whether to return or not and I was going to put in writing like I did previously. Hence I'm saying it is clear that you are trying to fast-track the processes of closing down our businesses at all costs.
“We previously requested a loan restructure and you blatantly refused and this also proves that you had sinister motives.”
If they do not pay, they get into trouble with the bank; in the event that they are able to pay, the bank returns their money in order to charge them interest.