by John Henning
Use Your Credit Insurance from Banks
Government has gazetted new regulations that will allow competitor malls to negotiate among each other, and with retailers and restaurants, to lower rent and offer rent holidays.
The three-week lockdown will wreak havoc on shops’ cash flow, as only stores that sell food and basic goods will be allowed to remain open.
On Tuesday, the minister of trade and industry Ebrahim Patel said at a press briefing that many shops and other businesses in shopping malls have already seen a decline in their turnover. “They face significant fixed costs, including rents and costs specified in leases”.
The regulations will enable tenants who are competitors to meet and to reach agreements with shopping mall owners and to address matters such as payment holidays or rental discounts and limitations on evictions, said Patel. Usually, malls and retailers are subject to strict competition law requirements, aimed at preventing any form of collusion.
The new regulations will also allow for the suspension of clauses in lease agreements that restrict some retail tenants from “undertaking reasonable measures” required to protect viability during the national disaster.
Initially, only restaurants, personal care services in malls, as well as clothing, footwear and home-textile shops will be included in these regulations, along with malls.
South Africa’s biggest retail banks say that only around 15-20% of their lending books do not definitely qualify for coronavirus relief measures announced.
Speaking to Reuters, representatives from the banks said that customers who would not qualify were those whose loans were already impaired prior to the outbreak. Others who had fallen behind on payments, for instance, may be able to access support, but this was not guaranteed.
Here’s what the banks said:
• FNB chief executive officer Jacques Celliers said around 70-80% of its lending book would definitely qualify under the current relief measures.
• Nedbank said around 80% of its book would definitely qualify.
• Standard Bank said that only around 5% of its book – those in the most serious impairment category – would definitely not qualify,
• Absa said 85% would qualify with no exceptions, while 8% did not qualify whatsoever.
Absa Group says it is rolling out an extensive relief programme for eligible customers impacted by the coronavirus with its relief measures.
Customers in good standing (with up-to-date accounts), and who have been financially impacted by the pandemic will have the opportunity to opt-in for payment relief, aimed at assisting with cash flow needs.
“We realise that this is a difficult time for our customers and businesses whose financial means are being negatively affected. After careful consideration and engagements with regulators, we are pleased to introduce a comprehensive customer, business and corporate relief programme,” said Daniel Mminele, Group chief executive of Absa.
He said that the programme, effective on Monday, 30 March 2020, is in line with the principles of an industry agreed approach.
“We urge those of our customers who are able to continue making their payments, to do so. This will enable us to extend these measures to many more who are not in a similar position,” Mminele said.
Eligible customers in need of short-term liquidity relief will qualify for the relief programme that applies to Absa’s credit products. These relief measures apply to Absa’s corporate, wealth, business bank,
private bank and retail customers. Crucially, this programme will not attract additional administration fees for customers.
Support to corporate and business banking clients will entail solutions based on their unique requirements and operations. Businesses and corporates are encouraged to contact their relationship managers for further details, the bank said.
The programme incorporates a three-month payment relief and allows customers in need of short-term financial relief to reduce their monthly instalments.
FNB has announced a wave of relief measures to help its customers navigate financial commitments as Covid-19 continues to impact the livelihood of many individuals across the country.
These measures will run from 1 April – 30 June 2020 and are aimed at providing relief to individual and business customers whose financial stability has been impacted by Covid-19, the group said.
The interventions will assist customers who demonstrate sound banking behavior, such as having honoured their repayments to the bank on a consistent basis prior to Covid-19.
“Our interventions will assist customers who demonstrate sound banking behaviour, such as having honoured their repayments to the bank on a consistent basis prior to Covid-19,” the group said in a statement on Monday (30 March).
“Our aim is to ensure that all our customers can continue keeping their financial affairs in order through this difficult time and we believe that our ability to service customers through multiple market-leading digital channels has provided relative comfort to customers to continue managing their day-to-day- banking, investing, credit and insurance needs.”
An FNB spokesperson said that all of its clients can access all this information under the Covid-19 icon on the landing page of our FNB app. This includes application criteria.
According to the app, those who may qualify to receive relief will be ‘customers in good standing’.
This includes those that are up to date with their commitments and have historically conducted their relationship with FNB and other credit providers responsibly and who experience financial challenges because of Covid-19, it said.
For those customers that qualify, FNB said its Covid-19 interventions will be for all products and will be available for a period of three months, covering the following:
- Installment cashflow relief, during which part or no installments/repayments will be due for a specific period;
- A preferential interest rate will apply to the Covid-19 relief interventions given;
- No fees will be charged for any relief granted;
- Assistance with processing credit insurance claims, where possible;
- Individualised bridge facilities for those who need it.
Nedbank has announced a number of measures to help individuals and businesses hit by the coronavirus, but has not yet specified what this entails, or who qualifies.
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.
“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. Small 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.
Standard Bank has announced that it will be instituting instalment relief for both SMEs and full-time students who have taken out loans at the bank.
The bank’s small enterprise clients with a turnover of less than R20 million were granted a three-month instalment relief on their business loan repayments. The latest instalment relief measure will further assist business owners who bank with Standard Bank in their personal and business capacity.
The three-month instalment relief will be available on 1 April 2020 until end June 2020. Customers need not contact the bank to initiate the offer, however, customers can continue to pay their accounts as usual should they not want to take up on the relief offer made by Standard Bank.
The bank has also announced a ‘second wave’ of relief measures to help its customer base navigate financial commitments.
The payment reprieve is aimed at easing the financial burden of customers earning R7,500 or less, who will receive three-month instalment relief if they are not in arrears on any of their accounts (as at 31 March 2020), the lender said.
“This relief applies to qualifying customers and their associated accounts, which include home loan, vehicle and asset finance, credit cards as well as short term loans. Customers who opt for the relief will see their interest and bank charges capitalised over the term of their loan agreements.”
Relief for qualifying students:
- You are still studying full-time.
- You have a student loan with Standard Bank.
- Your loan account is not in arrears as at 31 March 2020.
- Relief for qualifying bank customers:
- You earn less than R7,500 per month.
- You have a personal loan with Standard Bank (access loan, credit card, home loan, personal loan, revolving credit plan, vehicle asset finance).
- Your account is not in arrears as at 31 March 2020.
- You have a current account with Standard Bank.
- You can read more about Standard Bank’s relief measures here.