Banks postponed loan repayment deadline for nearly 438 businesses and about 1,500 individuals

Banking

Tuesday, 20 April 2021 16:18

Banks postponed loan repayment deadline for nearly 438 businesses and about 1,500 individuals

(Togo First) - In Togo, banks have deferred the loan repayment of at least 438 businesses and 1,454 people, in line with the BCEAO’s relief incentive. This was revealed last Thursday by the minister of economy and finance, Sani Yaya. In all, the repayment of CFA28 billion was pushed back to provide more room for businesses and individuals hit by the ongoing health crisis to breathe.

The incentive was introduced on March 21, 2020, as the pandemic was breaking out in the subregion. In its framework, banks were allowed to push back the deadline for loan repayment, for businesses, affected by the health crisis and related counter-measures, that would request an extension. Lenders could give these actors 3 months, renewable once, to pay what they owe. During this period, no interest, fee, or penalty for delayed payment was to be charged.

In exchange, banks could categorize the deferred debts as good debts, without impairing their results, portfolio quality, cost of risk, profitability, and equity.

“The classification of deferred maturities in a specific account in the category of sound loans will also alleviate the fear of banks regarding a potential spread in case of default on the original loans, due to exposures worsening as a result of granting additional facilities to allow debtors to resume activities so they can honor their commitments,” said Kossi Djokoto, a financial analyst at Attijariwafa bank in Togo (BIA).

Regarding new loans granted, banks provided CFA590 billion in 2020, thus making a total of CFA1,306 billion of bank loans poured into the economy. This total amount represents 30% of the rebased GDP - a performance, in absolute terms, that is lauded by minister Yaya.

Fiacre E. Kakpo

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