Retail banks have agreed to a mortgage holiday repayment scheme for those affected by Covid-19, Minister of Finance Grant Robertson has announced.
The six-month principal and interest payment holiday for mortgage holders and small business customers whose incomes have been affected by the economic disruption from Covid-19.
The government and the banks will also implement a $6.25 billion business finance guarantee scheme for small and medium-sized businesses to protect jobs and support the economy through this unprecedented time, Robertson said.
The scheme will include a limit of NZ$500,000 per loan and will apply to firms with a turnover of between $250,000 and $80 million per annum.
The government will carry 80 percent of the credit risk, with the other 20 percent to be carried by the banks, Robertson said.
He added that the Reserve Bank of New Zealand had decided to reduce banks’ core funding ratios to 50 percent from 75 percent, further helping banks make credit available.
Robertson said the Budget was still set to be delivered on 14 May, but it would look different to what it was going to say before Covid-19 took over.
Source: rnz.co.nz Republished by arrangement.