Basa says Covid-19 business relief loans likely to reach R24bn in January
However, this is nowhere near the R67bn banks estimate is needed
The Banking Association SA (Basa) said on Friday that it expects disbursements to struggling businesses under the R200bn Covid-19 loan guarantee scheme to reach R24.4bn by January 2021.
Even the best-case scenario in which the industry lobby group expects loans to total R43bn would not come to close to the R67bn banks have estimated is what clients need.
Speaking to the media on Friday, MD of Basa, Bongiwe Kunene, said a number of factors are behind the slow uptake of the loans.
With repayments scheduled to commence in January, businesses may be discouraged to take up debt, she said.
“We are also looking at the operating conditions of each of the companies applying for these loans and we are finally coming to some conclusion that, tentatively, looking at what we know so far, debt is not the only answer,” Kunene said.
She said although businesses have found themselves in distress, they may be considering alternative options such as cutting costs as well as changing their business models.
The government’s loan guarantee scheme is part of its plan to assist small businesses through the coronavirus pandemic and its subsequent fallout.
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