WELLINGTON: New Zealand said on Tuesday (Mar 24) that retail banks will offer a 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 NZ$6.25 billion (US$3.62 billion) business finance guarantee scheme for small and medium-sized businesses, to protect jobs and support the economy through this unprecedented time, Finance Minister Grant Robertson told a news conference.



The scheme will include a limit of NZ$500,000 per loan and will apply to firms with a turnover of between NZ$250,000 and NZ$80 million per annum.

The government will carry 80 per cent of the credit risk, with the other 20 per cent to be carried by the banks, Robertson said.

He added that the Reserve Bank of New Zealand (RBNZ) has decided to reduce banks' core funding ratios to 50 per cent from 75 per cent, further helping banks make credit available.

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