Airline going out of business could devastate the aviation industry, and the disbursement carries zero risk, says bankThe R3.5bn loan to SA Airways by the Development Bank of Southern Africa might not be irregular, but it is unusual.
The DBSA is an infrastructure bank with a mandate to finance social and economic infrastructure “to improve the life of people” and to “support economic growth”. It never lends short-term money and most loans are for five to 10 years. It does not have an enormous capacity to lend: disbursements for the entire 2018/2019 year were R9bn. The SAA loan will tie up a third of its disbursement capacity.
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