JOHANNESBURG, March 23 (Xinhua) -- South African banks offer payment holiday to Small and Medium Enterprises and students amid COVID-19 outbreak.
First National Bank (FNB) said in a statement on Monday that"FNB has reaffirmed its commitment to Small and Medium Enterprises (SME's) whose financial position is affected by COVID-19. The bank continues to work with the Banking Association of South Africa, in engaging with South African Reserve Bank and government on a variety of solutions."
Africa's largest bank Standard Bank is to offer a three-month payment holiday for small businesses with a turnover of less than R20 million (1.13 U.S. dollars), as well as for full-time students with student loans.
"We understand the pressures of being a small business owner. So we would like to lighten the load by giving our customers with a turnover of less than R20m a 3-month payment holiday, effective from 1 April 2020," the bank said.
The relief to small businesses and students came amid growing calls for banks to assist consumers during this period.
Calls have been made to other banks to match Standard Bank's loan payment.
However, Jannie Rossouw, Head of School of Economic and Business Sciences at the University of the Witwatersrand, cautioned about pressurizing banks to do this.
"While this is good, banks must first consider their balance sheet. If banks start offering relief they can't afford, their own balance sheet might be untenable,"he told Xinhua, "We can't make a blanket rule for every bank. This help from banks must be welcomed, but liquidity problems should be avoided."
Economist at Efficient group Dawie Roodt welcomed the assistance.
"It's an important and bold move by the banks. But businesses which are in distress should be the one's taking up this offer and not those doing well."
He said there was a possibility that the banks would work with government in supporting small and medium term businesses.
Measures to contain the outbreak have affected some businesses as restaurants and taverns are now required to operate between 09:00 to 18:00 weekdays. Sporting and other events have been suspended as gatherings of 100 people are prohibited.
South Africa has 402 COVID-19 cases with no fatalities up until Monday.
