FNB -COVID 19 Loans disapproved because they dont profit from it

App**** for a business covid 19 loan on the 37th July 2020. FNB dragged their feet for 8 days when they said it takes between 3-5 days to notify you of the outcome. I have full power of attorney over the business account and on the 8 day they inform me that they cannot speak with me they need to speak with the owner of the account. I give them the owners number and let then know on the 5 August that the owner will be available the whole day today the 6 August 2020. They never called. I feel that you are in direct contravention of the orders of the president that instructed banks to act with "a sense of urgency" as these loans are to pay staff, rental etc so that they can feed their families. They are not for holiday's, home renovations or for buying jet skis.

Let me explain this process so that everyone is aware why there is only about 5% of the government guaranteed funds (Total is R200 Billion for business assistance) allocated so far to businesses (from May-July) as the banks don't make this clear as from the last speech from the President.

The president has said that the banks cannot make any profit from these loans. and is only allowed to charge a fixed interest rate of 3.5% which will be stored for any future defaults by businesses. This creates a dilemma for the banks as they need to use their resources and funds to fund the loans and only once someone defaults do they use the 3.5% that they charged for interest. Once this is depleted they then request governments assistance. If FNB does did not follow strict credit measures they government holds them fully responsible for the loan amount. FNB is also 50% responsible for debt with the treasury also taking 50% responsibility. The reserve bank takes no responsibility for the debt.

As you can see from the above why would FNB approve these loans. It doesn't make financial sense. They are not allowed to make profit from the loans but need to take 50% of the risk.

In saying this the government and our president gave them the power and responsibility, in this time of need, to overlook profits and assist businesses in dire needs to support staff that need to feed families.

I can tell you right now as Ive spoken to many businesses that got declined as well the banks care about the bottom line and that is it. we belong to a business group of 900+ members and have discussed this loan in depth. Not even 5% of them were approved for Covid 19 loan.

Government needs to take decisive steps to force the banks to assist the people of South Africa or give that responsibility to companies that are willing to assist.

Clearly FNB does not see the urgency in this matter. I will be taking this matter up further with the local muncipality as well the government with the assistance and support of all of the other businesses that were declined or who were just ignored.

This is not how you treat people. Never mind your long standing and loyal clients, I have 4 accounts with you that will be closed within this month.

Hope your profits were worth it at the expense of a nation in crisis.