Banks’ support to businesses in times of corona increases to 30.6 billion euros
Over 40,000 businesses have received a larger credit, with a combined value of 27.6 billion euros. Over 6400 loans have been provided with a government guarantee. Altogether, 1.8 billion euros has been made available through the different corona guarantee schemes, such as the Corona SME credit guarantee scheme (BMKB-C), the finance guarantee (GO-C) and the Small Credits for Corona guarantee scheme (KKC). So far, 129,000 companies have received a postponement of loan repayments from their bank: totalling 3.1 billion euros. Banks are now offering customized support instead of collective postponements.
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“The figures seem to reflect that many entrepreneurs are able to manage the crisis relatively well. Banks, however, do have concerns about the impact of the possible hidden build-up of debt by entrepreneurs,” says Chris Buijink, President of the NVB. “Entrepreneurs have received many deferments for tax payments and many have also made agreements with their landlords and suppliers. Moreover, vouchers arrangements with customers will lead to refunds at a later stage. The economic setback is pushed forward this way for one or two quarters. Nonetheless, the pain inflicted by the corona crisis will be effectuated at some point. Banks are in a constant dialogue with customers to see whether they can take pre-emptive measures.”
“After the generic payment pauses which were offered by banks have come to an end, requests for further postponement of repayments are now being considered on an individual basis. The number of customers who are unable to meet their payment obligations, is very limited at the moment,” says Buijnk.
So far, almost 37,000 consumers received a pause for their mortgage payment or personal loan. In most cases this concerns a payment break of one to three months. This totals a combined value of 88 million euros – an increase from 85 million compared to four weeks ago. Consumers who want to receive a payment break for mortgage interest relief should notify this to their mortgage provider by 31 December 2020.
A payment break for a mortgage or consumer loan is a temporary relief solution that allows, for example, loss of income to be cushioned for several months. However, if customers foresee a more structural payment problem, for example due to unemployment, it is wise to (re)enter into a conversation with their bank. Together with the customer, the bank will look for a suitable and more long-term solution which is tailored to the specific situation of the customer. An important principle is that banks want to protect customers against financial burdens which they ultimately cannot bear.
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