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The South African Banking Association said 852,000 of the more than 1.2 million people who had applied for bank aid had been successful, while others were still being evaluated.
JOHANNESBURG – Major South African lender Absa said on Monday it had agreed billions of rand in temporary repayment relief for its borrowers, after the industry said 1.2 million people had applied for help.
The impact of the blockade on South Africa, a country of more than 58 million people, mostly poor, is expected to be devastating: the economy had already fallen into recession in late 2019, and official unemployment was close to 30%.
Absa, one of the top four lenders, said more than 376,000 of its account holders had applied for assistance and that the bank would deliver R5.8 billion of relief, such as payment interruptions or fee reductions, for three months.
The South African Banking Association (BASA) said the industry had already implemented more than R15 billion in temporary reimbursement aid, with about half going to individuals and the other half to businesses.
“The relief measures provided by the banks do not provide for debt cancellation, but rather forbearance in terms of repayment of loans for a period,” he said over the weekend, urging clients to meet obligations whenever may be possible.
Overall, 852,000 of the more than 1.2 million people who had applied for bank aid had been successful while others were still being evaluated, BASA said.
More than 90,000 commercial, small and medium-sized companies were also presented, with 75,000 approved so far.
The vast majority of companies still remain closed to some extent for more than five weeks in a national close, and the economy is expected to shrink by 5.8% this year.
Relief measures are only available to distressed clients directly as a result of the impact of the coronavirus outbreak and are considered “in order” by their lender.
This means that they must have been up to date with their payments on February 29, 2020 and have a good history of paying their debts on time, which is not the case for many struggling South African consumers and businesses.
The government has also announced a R200 billion loan guarantee scheme to encourage more bank loans to clients affected by the virus, but full details have yet to be announced.
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