Standard Bank
Standard Bank has announced a 90 day loan repayment holiday for South African startups, small and medium-sized businesses in a bid to soften the economic impact of the coronavirus.
According to the bank’s website, the Coronavirus Business Interruption Payment Scheme offers “payment relief to our small enterprise customers, as a preventative measure to shield them from the economic impact of the COVID-19 outbreak”.
Notably, the scheme will automatically defer payments of certain small and medium-sized businesses. Businesses that do not want to have payments rescheduled can opt out.
The initiative is set to launch on April 1 and will defer payments for 90 days until June 30.
“The interest and fees accrued over this period will be capitalised on your lending account. After the 90-day period is complete the new repayment will become due,” states the bank in a notice.
Not all businesses that bank with Standard Bank qualify. The bank says that to quality
- Businesses need to be South African based, with a turnover of no more than R 20 million per year;
- Customers need to have a Business Current account, Bizlaunch account or Business Lending account that is paid up to date;
- Businesses needs to be in good standing.
DA finance spokesperson Geordin Hill-Lewis, in a statement on Sunday, called on other banks to follow Standard Bank’s lead.
“This business loan forbearance, if it is matched by all banks, will give much needed relief to struggling businesses and families. It will give our economy the breathing room it needs to survive the next few months,” he said.
Read also: Kenya’s KCB Bank And Safaricom Launches $282m Stimulus Fund For Startups And Businesses
Nedbank
Nedbank, another South African bank has announced a number of measures to help individuals, startups and businesses hit by the coronavirus.
This support could include deferring payments (or part thereof) for a suitable period, extending existing loan periods or extending additional credit to manage short term cashflow shortfalls, the bank said in a statement.
“We are committed to supporting our clients during this time of uncertainty and have a number of solutions available to assist clients in good standing who are impacted by this pandemic. We undertake to work with our clients to help them through this period of enormous challenge for all South Africans. This undertaking to work alongside and support our clients with suitable individual solutions to cashflow challenges they may experience as a result of Covid-19 extends to any loan agreement they have with us.”
Nedbank said its clients are encouraged to contact the bank. Smalll business clients can speak to their dedicated relationship banker if they need to restructure their debt or change their payment arrangements as a consequence of Covid-19.
“We continue to work with our clients, regulators, industry bodies and government to mitigate the impact of Covid-19 and will provide further guidance to clients on these matters as they evolve,” it said.
FNB
FNB says it is committed to help SMEs and individual customers whose financial position is adversely impacted by the coronavirus.
“The bank continues to work with the Banking Association of South Africa (BASA), in engaging with the SARB and Government on a variety of solutions aimed at supporting both consumers and businesses through these difficult times. We will make further announcements on the nature of this support in the days ahead,” it said in a statement on Monday (23 March).
“FNB believes that SMEs and an economically viable consumer market are vital to the country’s economic growth prospects.
“It is the collective responsibility of both the government and the private sector to continue working together to identify immediate and long-term initiatives that will provide relief.”
FNB said it remains open for business to assist SMEs that qualify for credit to stabilise their cash flow and consumers who may want to cover unexpected expenses.
“We commend efforts by National Government to contain the spread of COVID-19 and interventions such as the development of a Debt Relief Fund by the Department of Small Business Development.
“FNB remains committed to helping consumers and businesses on their financial journey,” it said.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com