SA banks approve about R7bn in Covid-19 loans for small businesses
Local banks have approved just over R7-billion (about US$403-million) in loans for 4 800 qualifying small businesses since the launch of a Covid-19 loan guarantee scheme in mid-May to mitigate the economic impact of the pandemic, the Banking Association of South Africa (BASA) said.
In a statement dated Thursday, BASA said as at June 6, banks had received 29 700 applications for the initial R100-billion scheme, a special facility being managed by banks on behalf of the South African Reserve Bank and the National Treasury to help small and medium businesses buffeted by the health crisis.
The programme allows qualifying enterprises to apply for loans from their primary bank to fund three months operating costs, such as salaries, rent and supplier payments.
The scheme requires a credit approval process through which banks must evaluate if a business will likely be able to service all its commitments after the Covid-19 pandemic and the lockdown imposed by the government from March 27 to try and curb transmissions of the virus.
BASA said in addition to the loan guarantee scheme, its members had in the two weeks to June 6 approved another R2-billion in voluntary debt relief to individual customers experiencing financial distress due to the Covid-19 pandemic and lockdown.
"This brings the cumulative amount of relief offered by BASA members since they started assisting individuals with targeted relief to R16.5-billion," it said.
It said members had provided additional cash flow relief, including payment breaks, to commercial and small and medium enterprises worth R1.4-billion.
"Cash flow relief for eligible businesses and individuals is an important part of keeping the economy functioning and preserving companies and jobs during the Covid-19 pandemic and national lockdown," it said.
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