President Jacob Zuma qualified for the Venda Building Society (VBS) Mutual Bank home loan because his credit record from all credit bureaus was “clean” and he was a “low risk”, according to bank insiders.
Following the presidency’s announcement on Monday that the R7.8 million owed by Zuma for nonsecurity renovations made to his Nkandla homestead had been paid, speculation was rife that the president might not afford to repay the home loan – because the monthly instalments would be too high.
According to public information, the president earns R2.87 million a year – or about R240 000 a month. His after-tax income is estimated to be R140 000 a month.
He would have to fork out R78 000 a month to the bank, assuming the loan was over 20 years.
In addition to affordability, Zuma’s age was a factor.
Given that he was 74 years old, Zuma would be aged somewhere between 90 and 99 when he finished making payments.
But information provided this week by at least three VBS insiders and people close to the transaction painted a different picture.
City Press heard the bank had been worried about possible “comebacks” and, as a result, the home loan application went through “stringent” checks and balances.
After Zuma’s loan application form was received, it was forwarded to VBS’s credit department for the necessary checks, including ITC. It turned out that Zuma was “low risk”.
“This man literally has no account,” said those close to the transaction.
“So, he is clean. He was very clean on his profile. And his account was good,” added a VBS insider.
As part of the conditions tied to the VBS loan, Zuma had to settle the previous bond he had with FNB on the Nkandla property.
“It was a condition ... before we grant him the loan so that we are able to register the bond,” said a source.
Andile Ramavhunga, the chief executive officer of VBS, first presented Zuma’s financial credentials to the board of the bank’s credit committee. It was then approved by the full board with “standard conditions”.
