– Covid loans, a poisoned gift?
Many small businesses are unable to repay their loans, to which an interest rate has been added since last year. They feel abandoned.
Published today at 6:35 a.m.
In Geneva, nearly 10,000 Covid loans were granted during the crisis and around 3,200 have been repaid to date, or almost a third. The others are in pain and the decision to hit them with an interest rate last year is not likely to help the situation. The reason? Turnovers which are struggling to return to pre-pandemic levels, but also the surge in prices in construction due to the Ukrainian crisis, the increase in the cost of raw materials and inflation.
The “Tribune de Genève” has collected several testimonies from small entrepreneurs who denounce the lack of flexibility of banks. Credit institutions which put pressure to obtain their reimbursement even though they run no financial risk since Covid loans are guaranteed by the Confederation. It would seem that the pressures exerted are mainly aimed at getting rid of these credits as quickly as possible, which represent a lot of administrative monitoring work for them.
After only a month and a half of delay in repayment, the bank can turn to the Confederation to recover its money, a really very short period which puts some small and medium-sized Geneva businesses in difficulty. The latter also complain of a lack of attention from creditors and feel abandoned, including by the political authorities. They often don’t know who to contact.
These poignant testimonies remind us that the Covid crisis put a violent brake on the economy in 2020. For SMEs which had not built up reserves, times were really tough. And we should not forget: they are among the essential economic players in this country.
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