15 March 2020
Press release: SBI calls on government and big businesses to consider emergency assistance to SMEs. #Covid-19
SBI calls on government and big businesses to consider emergency assistance to SMEs
These days, South Africa’s small businesses are in a perpetual state of disaster planning, says CEO John Dludlu.
“Whether it is excessive red tape, trying to extract payment from big suppliers, Eskom’s black outs and now the uncertainty of disruption caused by Covid-19, SMEs just cannot get a break.”
Dludlu says that while we cannot be sure that the coronavirus will test our health system, already the effect on the economy is tangible and likely to get worse.
“Small businesses make up 98.5% of the firms in our country and we are relying on them to make a dent in unimaginable unemployment levels. Without them – and they are already extremely vulnerable – we have no hope of inclusive economic growth.
“We therefore call on government and big businesses to consider how they can assist SMEs in the event the coronavirus hits South Africa causing customers to stay home, employees to need paid leave, supply lines to be disrupted.”
The SBI notes that the UK will establish a £1 billion emergency loan scheme, which will cover the employer costs of sick leave and suspend rates payments for retail and leisure businesses. In addition, a £3,000 cash grant will be made available to the smallest businesses in their systems. Similarly, Australia is targeting a good portion of an $11 billion stimulus package at SMEs.
“While the SA government is strapped for cash, the former minister of the Department of Small Business Development acknowledged that some R15.5 billion was available in support of SMEs through various government agencies,” says Dludlu. “Now is the time to release this money.”
The SBI also calls on the venture capital firms seeded by the R1.4 billion donated by the CEO Initiative to the SASME Fund to earmark a pool of funds for low- or no-interest loans. In so doing, they will find businesses to mentor and help grow.
The same applies to the beneficiaries of the R2 billion fund established by the Public Investment Corporation — a joint venture with the Unemployment Insurance Fund.
Dludlu also suggests that government can consider lifting tax thresholds for SMEs, offering tax-free grants, and assisting businesses to protect their employees and customers from the possibility of contracting the virus with wide-spread public service announcements.
Businesses could offer discounted data and cloud services for virtual business meeting, planning and execution.
“We will also be urging our business chamber members to ensure that businesses and their employees in their communities are empowered to stay safe. Chambers should also be spearheading a local government, small, and big business collaboration and surveying what SMEs will need to weather the coming storm,” says Dludlu.
In the meantime, he says, small businesses should develop measures to identify their risk; develop a plan and take action. “Know what the impact of the virus could mean for your business and communicate with your employees, customers, suppliers. Talk openly with your bank, your insurance company and your landlord. Take action and let us know what you’re doing.”
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SBI – THE BIG VOICE OF SMALL BUSINESS
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