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FILE PHOTO: South African Finance Minister Tito Mboweni. /Reuters
South African banks and the government are looking for ways to boost take up of an up to 200 billion rand ($11.58 billion) loan scheme to help coronavirus-hit businesses, two bank executives and a source close to the discussions told Reuters.
Possible amendments being discussed include encouraging banks to ease their lending conditions, the source close to the discussions said.
“There are minor issues around the design,” the source continued, including wording in the terms that has led to banks applying their standard credit procedures and rejecting more applications than anticipated.
The scheme, launched in May, was meant to encourage banks to lend more, on more favourable terms, to small businesses struggling with the effects of the pandemic.
But concerns arose that the money — 40% of President Cyril Ramaphosa’s 500 billion rand economic stimulus package — was not being fully used after big banks approved only a few billion rand of loans in the first few weeks.
Lenders, the treasury and the central bank are in regular talks on the issue, the source said, with finance minister Tito Mboweni keen to announce changes to the scheme in his emergency budget on June 24.
(With input from the agencies)
