Extension of Covid-19 guaranteed loans will not save dying businesses – banks

Banks are not holding their breath that they’ll write more loans under the government’s Covid-19 Loan Guarantee Scheme now that it has been extended until July.

In fact, the Banking Association of SA (BASA) said in its update on the scheme take-up last month that it expects the demand for these loans to decrease even further in the coming months. 

Only R18.16 billion of these government-guaranteed loans had been taken up by small businesses by 27 March 2021. BASA says there has been little demand for the Covid-19 loans since the beginning of this year, just like it consistently flagged the slow uptake in 2020, which prompted National Treasury to make few tweaks on the qualifying criteria.