Financial Markets Authority
Bank lobby group the New Zealand Bankers’ Association says businesses and individuals financially affected by coronavirus should talk to their bank.
“It’s not a concern about any significant uplift in farmers in distress. No bank wants to see any business fail. To put it into perspective, there are about 52,000 farms and there are fewer than 10 mortgagee sales a year,” Beaumont said.
The New Zealand Bankers’ Association is encouraging businesses and individuals financially affected by coronavirus (Covid-19) to talk to their bank.
“We’re aware that some businesses, particularly small to medium sized ones, are being financially impacted by this unfolding global issue. The same may apply to individual customers working in sectors directly affected. Banks can offer affected customers support,” says New Zealand Bankers’ Association chief executive Roger Beaumont.
“Banks work hard with customers who find themselves in financial difficulty. It’s about doing the right thing and ensuring good customer outcomes.
“If you’re doing it tough as a result of coronavirus we strongly encourage you to talk to your bank.
“The sooner you talk to your bank, the better placed they are to help you. Good two-way communication between customers and their banks is essential to helping get through financial stress.
“Depending on your circumstances, there are a number of ways in which banks can help.”
Potential measures to assist bank customers include:
- Reducing or suspending principal payments on loans and temporarily moving to interest-only repayments
- Helping with restructuring business loans
- Consolidating loans to help make repayments more manageable
- Providing access to short-term funding
- Referring individual customers to budgeting services.
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Beaumont said the independent advice would help inform conversations between the farmer and their bank.
“There’s a recognition it’s in everyone’s best interest for a farmer to have up-to-date business and financial plans,” said New Zealand Bankers’ Association chief executive Roger Beaumont.
A new initiative funded by banks and the government offering support for farmers struggling with farm debt is now up and running.
The government has allocated $200,000 for the Farm Business Advice Support Fund, to be managed by Rural Support Trusts.
For a qualifying farmer the fund will provide up to $6,000 to pay for financial or business advice from an independent consultant.
The National Council of Rural Support Trusts and New Zealand Bankers’ Association have recently signed the agreement for the fund. Under the agreement, the RSTs will provide up to $3000, depending on an assessment of need, and the relevant bank will match that dollar for dollar.
RST National Council chair Neil Bateup says the fund is for a farmer who is feeling pressure. “This might be because there’s been some change or their bank has indicated they need to discuss their debt situation. The hope is that there may still be options available so that the wishes of all parties can form a solution for going forward.”
“There’s a recognition it’s in everyone’s best interest for a farmer to have up-to-date business and financial plans,” says New Zealand Bankers’ Association chief executive Roger Beaumont. “This will inform conversations between the farmer and their bank.”
Rural Support Trusts will take an application from, or on behalf of, a farmer who might qualify for assistance.
The consultant will provide a report, which will be given to the farmer and their bank.
This initiative involves ASB, ANZ, BNZ, Heartland Bank, Rabobank, SBS Bank, TSB and Westpac.
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Ministry of Business, Innovation and Employment
New Zealand Bankers’ Association chief executive Roger Beaumont said banks worked closely with farming customers and that was reflected in the low number of mortgagee sales in the sector. There were about 52,000 farms in New Zealand and fewer than 10 farm mortgagee sales a year, he said.
Ministry of Business, Innovation and Employment