COVID-19: NEW PROPERTIES GOING UNDER HAMMER

MBABANE – Challenging times.

Repossession and auction of assets that include; fresh cars, farms and houses for both businesses and individuals seem to be increasing rapidly these days. Just this past week,   ‘fresh’ cars from years ranging between 2014 and 2019 went under the hammer after being repossessed from owners by a bank. A sheriff, on condition of anonymity, told this publication that he equally noted the increase in attached property, saying auctions were no longer mainly about getting rid of old assets but they were literally shutting down most businesses.

Cases

He said in most cases, they were attaching the entire furniture of a business, which was rare in the past. He attributed the developments to the distress caused by COVID-19, saying most businesses, especially the small ones were in rent arrears, as others closed during the hard lockdown. One of the well-known salons in the capital city also had its property attached in the past week. This industry suffered greatly during the lockdown due to suspension of business to curtail the spread of COVID-19. “We sometimes have to attach property up to three times a day,” said the sheriff. Some of the country’s auctioneers confirmed that some of the cars they were selling were repossessed from defaulting clients.

In one of the prominent groups on social media discussing mainly financial matters, the issue of the cars being repossessed at an alarming rate was discussed in hushed tones, with the message being that it was a serious cause for concern. It was felt that the failure to service the loans could have been caused by salary cuts and layoffs. It was stressed that living within your means was of utmost importance in these times, with an advice to avoid buying things that depreciate, especially cars, unless there was a serious need.

Payments

The increase in property being repossessed comes at a time when some banks are also recording a surge in non-performing loan (NPL). A NPL is one in which the borrower is in default and has not made any scheduled payments of principal or interest for some time. In most banks, commercial loans are considered non-performing if the borrower is 90 days past due.

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