Banks offer clients debt relief amid Coronavirus outbreak

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’Marafaele Mohloboli 

THE Bankers Association of Lesotho (BAL) says all clients with loans must immediately engage their respective banks to come up with personalised debt relief measures for the period that they are unable to service their loans due to loss of income caused by the coronavirus (COVID-19) pandemic.

The personalised debt relief measures include payment holidays, deferment of loan repayment, extension of loan periods and extension of additional credits to augment their cashflows.

The majority of local companies have been on lockdown since 30 March 2020 when Lesotho embarked on a nationwide lockdown to avoid the possible spread of the coronavirus. This however, means that most companies will not afford paying salaries as they have not produced anything in April.

A fortnight ago, Prime Minister Thomas Thabane encouraged banks to come up with debt relief measures for their clients in the wake of the COVID-19 induced lockdown.

BAL chairperson and Lesotho PostBank managing director Molefi Leqhaoe recently told the Lesotho Times that they had come up with different packages for their clients in response to the premier’s plea.

“Individual and business clients who have been affected are expected to make arrangements with their respective banks by resorting to the availed options,” Mr Leqhaoe said.

“It’s either one pays their instalments in full after the three months or settles them on an extended period or that after the three months, one may pay their instalments spread over other months. We therefore, would like to encourage our clients that they would rather stick to the terms of their loan repayment plans because in the long term, the arrangement has some financial implications as the longer a tenure takes, the more interest one pays.”

He said the banks cannot afford to make other arrangements outside the said terms as they have not received any fresh liquidity injection. He however, said the banks remained ready to engage to clients to address the problems they may have.

Meanwhile, Standard Lesotho Bank head of marketing and communication Manyathela Kheleli said his bank would offer personalised debt relief measures for clients who have been directly affected by the coronavirus.

“These personalised debt relief measures are for clients who have been directly impacted by COVID-19 can include payment holidays as follows;

  • Deferring payments or part payment thereof for three months or
  • extending existing loan periods or
  • extending additional credit to manage short-term cash shortfalls for businesses.

“Customers will have to sign for these amendments on their existing contracts and each request will be treated on a case by case basis,” Mr Kheleli said.

He said the rest of the clients who continue to receive salaries as normal, such as government employees, security forces and teachers are expected to pay their loans as normal.

“Those who are affected by COVID-19 will also have to produce evidence by way of a letter from their employers. For businesses, the bank has availed templates that can be accessed through relationship managers for lodging applications.

“Clients are encouraged to make arrangements through their relationship managers, enterprise direct prestige direct or customer contact centre on the contact details provided.

“Business clients and Private Banking Clients can speak directly to their dedicated relationship managers to access this relief. These offers will be extended to clients who are in good standing with the Bank,” Mr Kheleli said.

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