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How many loans have been granted in the Covid-19 loan and debt relief project?

18 June 2020 7:17 PM
Tags:
sme
Lockdown
Covid-19 debt relief
COVID-19 loan guarantee scheme

South African banks have approved billions in loans for qualifying small businesses, since the Covid-19 Loan Guarantee Scheme was launched in mid-May.

South African banks have approved 7 billion rand in loans to about 4800 qualifying small business owners who applied.

The Money Show's Bruce Whitfield said he thought there would have been many more companies queueing for this relief programme - and wonders if it is working as well as it should.

Bongiwe Kunene, MD of the Banking Association of SA, strongly disagrees.

The scheme is working - what is actually happening is in the period March to the end of April a lot of enterprises had already had discussions with their banks and started restructuring some of their loan agreements. The scheme was launched on May 12th.

Bongiwe Kunene, MD of the Banking Association of SA

So the pipeline from May 12 to 6 June gives you that 7 billion...it's been a slow take-up for various reasons but it's working.

Bongiwe Kunene, MD - Banking Association of SA

One of the reasons is that the terms and conditions of the scheme were very specific - some of the companies that are in the category of less than 300 million turnover have active participation from their shareholders.

Bongiwe Kunene, MD of the Banking Association of SA

So they already got loans from shareholders - and one of the conditions is that accessing the scheme does not give you funds for paying off shareholder loans.

Bongiwe Kunene, MD of the Banking Association of SA

Listen to the interview below.

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18 June 2020 7:17 PM
Tags:
sme
Lockdown
Covid-19 debt relief
COVID-19 loan guarantee scheme

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