Private sector makes new proposals on relief scheme | 06 June 2020
Following consultations with stakeholders on how to better carry out the private sector relief scheme, the Central Bank of Seychelles has gathered feedback and concerns with regards to the scheme launched last week.
The private sector relief scheme has been set up to help micro, small and medium enterprises (MSMEs) facing revenue constraints due to COVID-19 and is being implemented the Development Bank of Seychelles and seven other commercial banks – Absa Bank (Seychelles) Ltd, Mauritius Commercial Bank (Seychelles) Ltd, Bank of Baroda, Nouvobanq, Seychelles Commercial Bank, Al Salam Bank Seychelles Ltd and Bank of Ceylon.
Under the scheme, funds can be borrowed in the form of loans or overdraft facilities with a fixed interest rate of 1.5% per year, as well as a six-month moratorium and maximum repayment period of three years for loans.
The private sector through the Seychelles Chamber of Commerce and Industry (SCCI) has brought in several proposals and recommendations relating to the scheme, including the moratorium period, guarantee and collateral, as well as a proposal for an extension of the scheme to help big businesses.
During her weekly press conference to update the public on the foreign exchange reserves policy and strategy vis-à-vis the COVID-19 pandemic yesterday at the Central Bank (CBS), Governor of the CBS Caroline Abel said technical work will be undertaken based on the outcome of the consultations.
Among the key proposals brought forward during discussions with the SCCI are the extension of the moratorium from six months to 12 months, the extension of the repayment period from three years to five years and a 100 percent guarantee from the government.
There were also proposals for extended coverage of the scheme on some form of capital expenditure (CAPEX) – the money an organisation or corporate entity spends to buy, maintain, or improve its fixed assets, such as buildings, vehicles, equipment, or land – and also the removal of the collateral provision requirement, as well as a separate scheme for large businesses.
A total of 98 applications have been received by the participating institutions, with nine approved requests (for a sum of R2,402,525.00), 14 rejected while 75 are still pending.
So far the total value approved and disbursed by the CBS between three participating institutions stands at R3,443,452.00
As for the moratorium being offered to clients with no interest or capital repayments for a period of six months for businesses or three months for individuals, Governor Abel said as of May 27, 2020, a total of 5,866 applications have been registered, with 4,528 from individuals and 1,338 from businesses.
A total of 5,720 requests have been approved, including 4,473 from individuals and 1247 from businesses.
A total of 27 requests – four individuals and 23 businesses – are still pending.