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”. Those close to the Zuma family said members only played a role in terms of refusing any donations.“He took out the loan on the strength of his employment and without anyone’s help. It is just him alone and his salary from the state,” said a VBS insider.He said the bank had an annual loan book of more than R300 million and the lowest number of people who defaulted on payments.Although the loan could have been approved by Ramavhunga, it was escalated to the board, the bank’s highest decision-making body, given the sensitivity of the case. A “conservative” valuation of the nonsecurity features of Zuma’s private Nkandla residence – “performed by an independent valuer” – amounted to R10.5 million.This was despite the fact that other parts of the property could not be valued, for security reasons.The difference worked in Zuma’s favour as the amount was significantly higher than the R7.8 million loan application before the bank.Also, said a VBS shareholder, Zuma’s net salary was recorded to be well over R200 000 – when monthly allowances were included – and that boosted his loan affordability assessment. “Presidents are funded by government for almost everything. So his take-home pay is like pocket money”.Zuma’s monthly instalment amounted to a little less than R70 000 because of a R900 000 deposit fee that he had paid as part of the 20-year loan agreement.The money would be debited from Zuma’s personal Absa bank account, which “only had records of his salary payments and no money from elsewhere”. This meant that he was receiving money only from the state.Regarding Zuma’s age, the VBS insider said there was no law that if a person was over 65 years old, they could not get a bond. “It is a flag for banks to see that chances are, a person who is 65 years old will retire. But if you are employed after age 65, you are still regarded as being creditworthy.”He said the Constitution had done away with the “death table”, which recorded the chances of a person dying.According to VBS’s credit policy, it was enough that Zuma proved at the time of application that he had a source of income – and being the president, he would receive an income and benefits for life.In the event that Zuma was impeached, several insurance policies were in place to ensure the bank’s interests were protected.The SA Reserve Bank had also been kept updated about the transaction, even though it was not necessary for VBS to do so. According to regulations, only transactions exceeding 25% of the bank’s equity should be reported to the central bank. “We were being stringent because we are a black-owned bank and do not want any comebacks,” said an insider.