ABSA has stood out as one of the best banks committed to a broad range of relief mechanisms to support businesses and individuals during the Coronavirus crisis that is threatening the very essence of life world over.
The bank has a payment relief plan, credit life, SAFT and a host of covers to help its valued clients get through this very strenuous phase of COVID 19.
This article will analyse all the COVID 19 initiatives that ABSA has for its customers.
SAFT
In a sign of unwavering support for Small, Medium and Micro-sized Enterprises (SMMEs), communities and the economy at large, Absa partnered with the South African Future Trust (SAFT) to administer the disbursement of funds to SMME employees whose income will be impacted in the wake of the COVID-19 pandemic.
“Absa is committed to supporting initiatives that alleviate the impact of COVID-19 on small businesses, who provide employment to millions of people whose jobs would otherwise be threatened by this pandemic” said Bongiwe Gangeni, Deputy CE of Absa Retail and Business Bank (RBB SA).
What is SAFT?
SAFT was established by Nicky and Jonathan Oppenheimer who pledged R1 billion to mitigate the economic effects of the COVID-19 crisis by protecting jobs during this time.
ABSA, together with three other banks; Standard Bank, FirstRand Bank and Nedbank are administering the scheme.
SMME clients of these banks are invited to apply for support from SAFT. All four banks have waived their fees related to administering this fund during this period of national disaster, to maximise the funds available to recipients.
Absa SMME clients with a turnover of less than R25 million per year, in good health, but with short-term cash flow constraints due to COVID-19 and who have been trading for at least 24 months will be eligible.
Sectors that have been critically impacted by COVID-19 include tourism, hospitality, manufacturing and services. Businesses will be able to apply for a five-year interest-free loan from SAFT to give their employees a lifeline to buy the essentials they need to survive through the crisis.
This means your loan must be paid in full on or before 31 December 2025 – the loans are interest-free and carry no early-repayment fees.
The Loans can be paid as a lump sum or in instalments over 5 years at the discretion of the business. Loans paid after this date may be charged interest.
A standard amount of R750 per week per employee for 15 weeks will apply.
SAFT will be monitoring the current COVID-19 situation and may adjust the 15-week period
In the long run, any funds donated to the structure will be redeployed towards accelerating economic growth and employment creation in South Africa.
If you can’t pay back your loan, you have to sign a new loan agreement that will be cognisant of your default status.
Loans approved before close of business every Wednesday of the week will receive their first payment on the Friday thereafter. Payments will be made weekly on a Friday.
How to apply
Step 1: Download and complete the following documents
- Application
- Beneficiary list
Step 2: You will need to provide the following documents with your application:
- Company registration number (closed corporations)
- ID number and business address (sole proprietors)
- Master’s reference number (if applying on behalf of a trust)
- Names, ID numbers and email addresses of all directors, trustees, sole proprietor or members
- Income tax reference
- PAYE number (if applicable)
- A list of all full-time employees who require SAFT payments including ID numbers, full names, mobile telephone number, email address and bank account details
Step 3: Email us the completed application, beneficiary list and required documents to absa.saft@absa.africa with the subject: SAFT Application
Credit Life
Should you have a temporary inability to earn income during the lockdown irrespective of whether this is due to formal retrenchment, ABSA has a cover to support you. We also provide you with the option to temporarily pause your premium payments to help make ends meet.
If you have either Gold or Premium Value Bundle accounts you will be able to make use of your Retrenchment or Disability cover to further improve your financial resilience.
ABSA will also ensure a single insurance claim process covering all your insurance products, making the process of claiming as simple as possible for you.
ABSA is also providing its clients you an option to temporarily pause their premium payments to help make ends meet.
If you are struggling to pay the monthly premiums on your funeral and life cover, you may skip an additional two monthly premiums and still keep your cover.
According to the bank, any policy where premiums are paid by debit order qualify.
These include Funeral plans, Ultimate Protector, Estate Provider Plan, Personal Accident, Absa Cash Plan, Education Protector, Life@Ease, and Instant Life.
The skipped premiums will be recovered when you claim or surrender, the policy matures or from your cash back.
You don’t have to do anything to qualify for this, relief will apply automatically if you miss one or two payments. The bank will send you an SMS to confirm the relief.
Cover for loss of income on Credit Protection Plans
If you have an active Credit Protection Policy with a Retrenchment benefit on your Absa Personal Loan, Credit Card, Overdraft, Revolving Loan, Vehicle Finance, or Home Loan, you may be able to claim.
Absa Life will also pay the minimum installment on your credit agreement for 3 months if you become unable to earn an income between 27 March and 30 June 2020 and have a valid claim.
Contract work, unpaid leave, and temporary absence from work are also covered. If you have been retrenched, you may be able to claim for up to 12 months’ installments.
Payment Relief Plan
In order to minimise a myriad of financial challenges arising from COVID 19, ABSA has come up with comprehensive payment relief plans for retail customers.
The plan also applies to the following ABSA credit products:
- Home Loans
- Personal Loans
- Credit cards
- Student Loans
- Vehicle loans
Customers who qualify will get a 3-month non-payment period to help ease their financial burdens.
Loan instalments, interest and fees will accrue monthly and be capitalised into your loan account, but loan terms and repayments will be adjusted to help you cope during this difficult period.
Corporate and business customers will receive tailored solutions specific to their individual circumstances. These solutions will apply to credit products including:
- Loans
- Mortgage-Backed Business Loans
- Commercial Assert Finance products
Our plan does not carry any extra fees or costs. It is aimed solely at helping our customers who are struggling with cash flows due to the COVID-19 pandemic.
Home Loans
The Home Loan Payment Relief Plan gives you a 3-month non-payment period during which you will not have to make any repayments on your Home Loan. Interest, service fees and insurance will accrue and be capitalised but you will not need to pay these during this period.
The inclusion of insurance premiums as part of the payment relief plan only applies where the insurance premium is already part of the monthly Home Loan instalment.
At the end of your plan, your loan term will be extended to cover all capitalised amounts. Your loan terms will also be recalculated to ensure your new payment amount is not greater than your current repayment amount.
Anyone with an Absa Home Loan qualifies provided their payments are up to date.
The following exclusions apply – if you are currently:
- In a debt review
- Undergoing liquidation and insolvency
- In a legal and defended matter
- Part of a deceased estate
- Already made an arrangement with the bank (forbearance)
- Have more than one instalment in arrears
- The following loan types are also excluded:Private Bank 1 and Universal Credit Facilities
- Pension Powered Home Loans
- Further Advance is excluded for the duration of the payment relief
- Re-Advance is excluded for the duration of the payment relief
- To apply, call: Absa Home Loans Collections Contact Centre 0861 22 22 72 (select option 3) or E-mail: bondrs@absa.co.za
Credit Cards
Absa credit card payment relief plan allows you to skip paying the minimum amount due on your credit card account for a period of 3 months.
This plan was created in response to the COVID-19 outbreak and lockdown to give you some financial assistance during this time.
While the payment relief plan is applied on your account, it will not reduce your owed balance and fees, credit life premiums (if applicable) as well as interest will still accrue.
However, your account will not fall into arrears (if your account is in order). So, the best way to reduce your balance is to continue paying your minimum amount due as you normally would do.
The plan is absolutely free – no additional fees will be charged to implement the payment relief on your account.
If your account is up to date on payments then we will contact you via an SMS. Simply respond to the message as instructed to join the plan. If you do not receive an SMS but would like to understand if you qualify, call 0861 222 272 (select Option 3) or go to the ABSA website.
Personal and Students Loans
All ABSA Personal Loans and Student Loans qualify for the Personal Loan Payment relief plan. However, Revolving Loans, Express Loans and Instant Loans are excluded.
If you have a Personal Loan and Student Loan that is not in arrears on your repayments you may apply for the Payment Relief Plan.
The Personal Loan Payment Relief Plan will give you a 3-month non-payment period during which you will not have to make any repayments on your loan account.
During this period your loan instalment, service fee, and credit life fees (if applicable) will accrue monthly and be capitalised into your loan account. We will extend your agreement term to ensure that your new instalment amount is either the same or lower than your current instalments.
No additional documentation is required to apply.
All you need to do is send an email to; EBPaymentRelief@absa.co.za or opting-in on the SMS that ABSA will send you.
The bank will assess your application and notify you via SMS if you have qualified.
