Thinking in those who have been affected economically and their incomes have been reduced or paused by the impact of the coronavirus and the national disaster, Capitec, with 13.9 million clients, would increase a range of financial benefits.
Capitec has been working in the process of adjusting its credit policies and procedures to help clients who are late on credit installments in the course of the crisis that is hitting the South African economy.
Gerrie Fourie, Chief Executive Officer at Capitec Bank, said that “The severity of the impact on the economy will depend on the length of the national lockdown. We are working together with the South African Reserve Bank and other stakeholders in an attempt to minimize the financial impact on our clients and employees.”
Capitec will not charge any fees on interest rates and there will be a wide variety of options available for clients who want to make a payment break.
According to Fourie, for those looking for a stop payment benefit, the options are the following:
“You can either extend the term and pay the interest at the end, or you can increase your installments after the payment break is completed and then catch-up with the three-month break. On any treatments, we don’t ask for any additional costs except for the interest costs,” he said.
He added “We continually review the financial position of our credit clients on an individual basis and implement the necessary remedies where possible to assist clients with their cash flow during this difficult period. Executive management monitors the national crisis and adapts our response on a daily basis.”
During the last month, Capitec confirmed that their credit insurance will cover their clients for temporary loss or reduced income as a result of the financial crisis due to the coronavirus in South Africa. Capitec is negotiating with its credit insurance provider to get additional coverage to help those clients facing retrenchment or unpaid leave for an extended period.
In 2017, new regulations were approved to apply to credit insurance in South Africa. If you have taken a Capitec bank loan you should be covered in the case of being unemployed or unable to generate any income, and not necessarily because of illness. Even if you are fired, but put in unpaid leave, you should be covered and your installments will be covered for up to 12 months.
In other words, Capitec credit insurance offers clients who experience unemployment, involuntary retrenchment, permanent or temporary disability coverage for their outstanding credit balances, and installments of up to 12 months. If a client loses all their income, the installments will be paid for twelve months, or for the remaining period of the loan, or until they can generate income again, whichever comes first. What Capitec requires is credit insurance for credit cards and loans that extend over seven months or more, depending on each client’s case.
What differentiates Capitec from other banks that do offer a general payment holiday is that in the event that a client loses 60% of their income, they will only be covered by 60% of the installments, according to Capitec credit insurance.
Executive of marketing and communications at Capitec Francois Viviers says “We assess every client’s situation on an individual basis and do not believe that a payment holiday is right for every client, especially if a client can continue to pay their installment in part or as a whole.”
Capitec made clear that in the event of the client passing away or being retrenched, the full outstanding loan balance will be settled.