Black business has welcomed the government’s decision to replace the R100bn loan guarantee scheme and allow institutions that are not banks to help small enterprises get credit during the pandemic.
On Thursday, finance minister Enoch Godongwane announced that the scheme, introduced last year, which enabled banks to support companies in distress due to the Covid-19 crisis, had been concluded.
A new business support measure will be introduced in its place to enable affected businesses to bounce back.
“This we will do by providing expanded funding options, broadening the types of financial institutions which can provide this funding to include development finance institutions and non-banks,” Godongwane said.
The move is one of many interventions introduced by the government to help small business recover and create much-needed employment.
Kganki Matabane, CEO of the Black Business Council (BBC), said the move was a victory for small businesses.
“We have been making this call for a long time. We’d like the minister to not invite us at the end. Last time when they did the design for the scheme, they did not invite us. They only invited us later when they realised that it is not working.
“It [the government’s move] shows that this minister is more receptive than the previous one. Banks were never going to lend to many black organisations because of their criteria. But the other institutions, because they deal with small businesses on a daily basis, are likely to understand them better… Even their risk appetite is much higher. Having more institutions helps as it improves accessibility to businesses in the rural areas,” Matabane said.
The BBC also welcomed Godongwane’s announcement that the public procurement bill would be brought before parliament in the 2022/2023 financial year.
The bill is expected to transform and bring efficiency to procurement in the public sector, and grow the participation of small businesses.
Godongwane also announced R11bn additional funding for the SA Special Risk Insurance Association to enable the institution to continue settling legitimate claims from businesses damaged during the July unrest.
Matabane welcomed the funding but lamented that small businesses had been excluded in the assessment of damage caused by the protests.
To further support the recovery of the tourism sector, Godongwane announced the introduction of an e-Visa system involving 15 countries by March next year.
Tourism Business Council of SA CEO Tshifhiwa Tshivhengwa welcomed the move and said the sector had been making the call for the e-Visa since 2019.
“By now we should have rolled it out to coincide with the tourism recovery and target new markets. It is good that it is being talked about. We need to expand beyond 15 markets. We need to see the product implemented to all countries that still require a visa to travel to SA.
“If we can get it rolled out in China, India, Eastern Europe and countries like Nigeria, it will have a huge impact on the sector. It makes it easier to come to South Africa. We still have to do the marketing,” Tshivhengwa said.
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