South Africa’s ABSA in bold move to help customers hit by Coronavirus
Absa, South Africa’s largest financial services group has unveiled a debt-relief programme for retail and corporate clients, joining rival Standard Bank in trying to cushion the blows to the economy expected to take a battering from a nationwide lockdown to fight the highly contagious coronavirus.
“We realise that this is a difficult time for our customers and businesses whose financial means are being negatively affected,” CEO Daniel Mminele said in a statement Sunday.
Absa’s programme, which starts on April 1, came three days after SA entered a lockdown that restricted economic activity to a few industries and raised worries about its impact on distressed consumers and businesses, especially smaller businesses with limited cash buffers.
It also came 24 hours after the SA Reserve Bank fired its latest salvo to help the economy navigate the next few weeks, saying it would allow lenders to dip into the capital buffers from April 1 and free up about R320bn in lending.
Absa which has over 1.3 trillion rand in assets and employs 40,000 people, said the programme for its corporate and business clients will entail solutions based on their unique requirements and operations.
For retail clients, the programme incorporates a three-month payment holiday and allows customers to reduce their monthly repayments.
“This means the programme will give customers the opportunity to either continue paying if they are in a position to, to pay reduced instalments by agreement with the bank, or to defer payments for a period of three months,” the company said.
Absa, which will extend the programme to clients elsewhere on the continent where it operates in 12 countries, said small businesses like hairdressers, pharmacies and coffee shops at its campuses would be granted a rental holding for three months.
Last week, Standard Bank said it had halted loan repayments for small businesses and students for three months to ease the economic toll of the respiratory disease-causing virus. The bank extended the programme to clients with monthly income of R7,500 or less per month on Sunday.
Small businesses in good standing and with annual turnover of less than R20m are eligible, although interest and fees will be added to the total balance of the loan between the beginning of April and the end of June.
Students will receive a payment holiday over the same period, although no interest or fees will be charged, and the repayment period will be extended.