Pressure upped on payment holidays
26 March 2020 | Disasters
The ministry of finance will engage local commercial banks over the possibility of payment holidays to give Namibians relief during the partial lockdown that comes into effect tomorrow.
Namibian Sun understands that the Banking Association of Namibia (BAN) yesterday met with the Bank of Namibia (BoN) in what is thought to be an attempt to weigh such holidays.
“Discussions have started, led by the finance minister [Iipumbu Shiimi],” a banking source said yesterday.
Socio-economic activist Job Amupanda has also written a letter to BoN, asking the central bank to urge all commercial banks to help ease the burden on Namibians affected during the lockdown of the country’s two economic hubs, Khomas and Erongo.
Many small businesses are expected to close, while street vendors have already been ordered to remove their wares from the streets.
Amupanda’s plea was sparked by a decision by three commercial banks in South Africa, which offered borrowers payment holidays.
Nedbank South Africa said it would support its clients with suitable individual solutions to cash-flow challenges they might experience as a result of Covid-19, which extend to any loan agreements they have with the bank.
In a letter to BoN deputy governor Ebson Uanguta, Amupanda urged that the central bank go a step further by leading an intervention applicable to all banks instead of private initiatives by individual banks.
“We can do it. I am aware, and indeed appreciate, the measures already taken by the bank in terms of repo rates. The situation, however, requires us to go further. It does not need explanation and elaboration how this important measure impacts individuals’ and companies’ ability to service the loans they have with commercial banks that are yet to come to the table with a significant contribution during this crisis,” he said.
Meanwhile, talks are under way between the government and the financial sector to find solutions to the financial implications of the coronavirus outbreak.
This was confirmed by finance minister Iipumbu Shiimi, who said these talks may extend beyond the financial sector.
“As soon as these consultations are finalised, we will inform accordingly. We need to find a balance, because the money that is in the commercial banks belongs to you. How do you structure the loans so that you would still be able to repay the loans afterwards?” he said.
When he announced new travel restrictions on Tuesday evening, President Hage Geingob announced that a solidarity fund had been established to assist the most vulnerable Namibians. The details are still being worked out.