Financial Relief for Victims of the July 2021 Unrest

In the wake of the July 2021 unrest in KwaZulu-Natal and Gauteng, which damaged banks and other businesses and economic infrastructure, banks granted financial relief worth R246,7 million on 15 009 credit agreements as of 09 October 2021.

Seventy–one percent of the relief provided was on secured credit agreements (asset-based finance and mortgages), 19% on credit facilities and 10% on term loans. Fifty-five percent of the relief went to small businesses with a turnover of under R20 million per annum.

The financial relief provided constituted payment breaks or extended terms on credit agreements. Prevailing interest obligations were maintained and interest will continue to accumulate over the life of the loan. Those who are obliged to resume repayments of their loans at the end of the deferral period are required to do so.

The relief cannot become debt ‘write–offs’, as banks must continue paying interest to customers who have deposited funds with them and must recover their operating costs to remain sustainable businesses.

Take–up on unrest relief offered by banks has been relatively low, even though many pre–approvals were granted. It is apparent that:

Most businesses are reluctant to take on additional debt, because of uncertain economic conditions.
Most of the affected businesses have received insurance pay-outs.

Overall banks are not expecting many more applications for unrest relief. However, in the normal course of business, it is standard practice for banks to assist customers in good standing, experiencing temporary financial distress. Individual banks may offer their customers tailored assistance, depending on their risk management policies.

The repair of automated teller machines (ATMs) and bank branches vandalised and looted during the unrest is on schedule. By end of September:

Of the 1 813 ATMs damaged, 527 (29%) are already fixed.
Of the 285 branches damaged in the July unrest, 110 (39%) are already repaired. The biggest concerns are the condemned malls where branches cannot be fixed until the malls are rebuilt.

Banks and ATM operators successfully managed the last two South African Social Security Agency (SASSA) payment runs and extra capacity is being added weekly. Every month 12,5 million beneficiaries receive grants worth over R15 billion, using banking infrastructure. Banks remain committed to ensuring appropriate and affordable financial services to the communities they serve.