Regulatory review could boost SME funding, says Absa
Absa has asked the Black Business Council to lobby the government about the reserves banks need to hold when lending to SMEs
Absa Bank’s head of business banking in North West Kgalaletso Tlhoaele has asked the Black Business Council (BBC) to lobby the government about making exceptions for the reserves banks need to hold when lending to small- and medium-sized enterprises (SMEs) so that more businesses can get business loans and at cheaper rates. Speaking at a forum hosted by the BBC on unlocking SME funding, Tlhoaele said banks have been constrained by, among other things, capital reserves they are required to hold under the Basel III international banking regulations. The minimum reserves under Basel III were increased to strengthen supervision and risk management of banks after the 2008 global financial crisis. The regulation requires banks to hold additional reserves when they lend money. “We are saying, in particular, we need to see whether the government cannot support some exemptions that will enable us to have a much better pricing regime for SMEs,” said Tlhoaele. Asked if this was not a reckles...
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