South Africa—cross border banking and finance guide
Produced in partnership with Ulrike Naumann of Bowmans
South Africa—cross border banking and finance guide

The following Banking & Finance guidance note Produced in partnership with Ulrike Naumann of Bowmans provides comprehensive and up to date legal information covering:

  • South Africa—cross border banking and finance guide
  • Loan market and developments
  • Lending
  • Security and guarantees
  • Enforcement
  • Intercreditor issues
  • Governing law and disputes

Loan market and developments

Please provide a brief overview of the current state of the loan markets in your jurisdiction and any significant recent market developments.

The lending market in South Africa has seen renewed activity with a number of buyouts and other corporate action being funded by bank lending.

As a result of the slow-down of economic growth in South Africa and other key jurisdictions, there has been an increase in debt restructuring transactions, partially funded by new money and partially requiring creditors to renegotiate the terms of their debt.

Please provide a brief overview of forthcoming changes to the law or other matters that may affect the loan markets or the responses to the questions below.

The legislature is currently working on amendments to the Insolvency Act 1936 which will affect the insolvency laws applicable to companies, and which will in turn have an effect on loan financing to such companies.

Lending

Is it necessary to obtain any consents or licenses in order to lend in your jurisdiction or enforce rights under a loan agreement and if so what is the process for obtaining the consent or license? Are there any other restrictions on lending that foreign Lenders should be aware of?

The prior approval of the South African Reserve Bank (SARB) is required:

  1. for a loan made

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