SBI, Fasa welcome Bounce Back
THE Small Business Institute (SBI) and the Franchise Association of South Africa (Fasa) last week welcomed the government’s Bounce Back Support Scheme, which came into effect last week and enables additional funding to qualifying businesses and small medium enterprises (SMEs).
John Dludlu, CEO of the SBI, said although the current Bounce Back Support Scheme appeared to be targeting formal sector SMEs, there was still a need to extend help to informal sector operators, especially in KwaZulu-Natal (KZN) and the Eastern Cape.
But Dludlu said this initiative was welcome as SMEs had been brutally smacked by the Covid-19 pandemic, the July mayhem (in Gauteng and KZN) and, most recently, the floods in parts of KZN and the Eastern Cape.
“The SME ecosystem has been advocating for something like this, especially the ‘first loss’ element in financial assistance. Hopefully, SMEs, especially those with high growth potential, will utilise this scheme. After all, the country’s job crisis can only be resolved by thriving small businesses,” Dludlu said.
Last week, the Treasury announced that the Bounce Bank Support Scheme for businesses signalled in the Minister of Finance’s February 2022 Budget Speech had come into effect. It said the purpose of the Bounce Back Support Scheme was to provide additional funding to qualifying businesses in order to grow the economy and facilitate job creation.
“The scheme is expected to facilitate the recovery and bounce back of businesses beyond the Covid-19 pandemic lockdowns. It will also help those businesses recovering from the July 2021 civil unrest in KZN and Gauteng, and the ongoing flood-related disaster,” the Treasury said in a statement.
Dludlu said the key lesson from past interventions was that simplicity was key to how many businesses would take up the scheme.
According to the SBI, the latest scheme appeared to have taken into account previous failures. Inclusion of commercial, non-traditional financiers and development finance institutions was helpful given the capacity challenges faced by the state.
Dludlu warned that South Africans needed to keep in mind the reality that faced firms and households as the levels of indebtedness were too high to take on more debt.
“We look forward to the equity scheme promised by the National Treasury which is planned for later in the year.”
Freddy Makgato, CEO of Fasa, also welcomed the new Bounce Back Support Scheme. “While established franchises have insurance cover to fall back on, it is the franchise sector as a whole that needs the support of the government with funding schemes that will assist existing and new entrepreneurs.”