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Londiwe Buthelezi
The Banking Association of SA (BASA) says banks have approved 27 percent of the Covid-19 Loan Guarantee Scheme and another 13 percent is still being processed.
- The prime reason for the high rejection rate is that many businesses who applied were already in financial distress before the pandemic.
- BASA says at this rate, banks expect that only R24.4 billion of the R200 billion would be given to needy SMEs by the end of January next year.
Banks have only approved 27 percent of applications they received from businesses under the Covid-19 Loan Guarantee Scheme, said the Banking Association of SA (BASA) on Monday. The banking lobby group said another percent of applications were still being assessed by 21 November, while 43 percent were rejected because they did not meet the criteria set out by National Treasury.
BASA said banks received just over 47 000 applications from small and medium enterprises who needed financial relief under the scheme, which has received a lot of criticism for the low amount approved for businesses in need. As at 21 November 2020, banks had approved R17.5 billion in loans under this scheme.
BASA has in the past said that the slow uptake was partly due to banks giving their customers the relief they needed to deal with the initial lockdown blow months before the loan guarantee scheme took off. The scheme kicked in in May, when banks had already voluntarily begun restructuring their loans to SMEs.
Another qualifying criterion that has seen many businesses’ applications rejected is that the scheme does not bail out businesses who were in financial difficulties before the pandemic hit. Applying SMEs must have been in good standing at 31 December 2019.
“The main reasons for the rejections are that the businesses were not in good standing before the pandemic and did not have a good record of paying their debts, or the requested loan value was too high making the repayments unaffordable for the business,” said BASA in a statement.
The group said its members, along with the Reserve Bank and National Treasury, continue to monitor the reasons for this high rejection rate, with a view to make the scheme more accessible, while ensuring that taxpayers’ funds are not exposed to undue risk.
BASA said based on present trends, banks expect to extend R24.41 billion of these loans to by January 2021.
Bloomberg
Real-time holograms, brain tech: Nokia leads 6G project for European Union
Scott Moritz
Nokia Oyj is leading a group of companies and universities in a European Union funded wireless project called Hexa-X to help jump-start a new generation of mobile technology that’s already being called 6G.
The group includes wireless gearmaking-peer Ericsson AB, mobile carriers Orange SA and Telefonica SA, and technology companies including Intel Corp. and Siemens AG. They’re joined by the University of Oulu and the University of Pisa, according to the membership list.
While 5G network deployment is still in its infancy, with 100 wireless carriers worldwide offering the service in limited areas, the preparation for 6G development is getting started in several regions around the world.
In addition to Nokia-led Hexa-X in Europe, there’s Next G Alliance and O-RAN Alliance in the U.S. The Chinese government is also funding a 6G development group.
6G technology is expected to use super high-frequency terahertz airwaves and deliver advanced connectivity, which could even link up to technology in the human body and brain — as well as real-time holographic imaging — starting in 2030.
Devaki Chandramouli is Nokia’s head of North American standardization and is one of the engineers leading 6G development with the Next G Alliance. She says she wants to establish three objectives initially.
“The main goal will be to develop the vision, the road map and the timeline,” she said. “Then put together a timeline for the technology direction. And the third point is to facilitate the interaction with U.S. government agencies to fund the research and also provide the input for the technology development.
Bongani Ndlovu