South African lender Absa Group said the combined impact of the worst power cuts in living memory and soaring interest rates, with another rise expected next month, has left small and medium firms as well as consumers at risk of default.
Consumers were already struggling to adjust to rapid interest rate rises that have led banks to increase their prime lending rate. It is expected to reach 11% next month.
Quinn said the biggest impact of blackouts was on small and medium enterprises as, unlike big corporations, they do not have the financial and operational wherewithal to set up renewable power to maintain production. If they fail, their employees lose their jobs and are unable to meet repayments on loans.
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