Minister’s bounce-back plan for SMES welcomed
Scheme to deliver R20bn in backing to country’s small businesses
Small businesses have welcomed the announcement made by Finance Minister Enoch Godongwana in his budget speech of a new bounce-back scheme that will deliver R20-billion of support to SMES.
The first of these is loan guarantees of R15-billion facilitated through banks and development finance institutions.
Godongwana said government would underwrite the first 20% of losses, and collateral requirements were relaxed.
Jason Mellow, head of business insurance at Miway, said: “SME owners need to devote time to study the proposals when the details are released and ensure they take full advantage of what seem like significant opportunities to raise finance on favourable terms to fund growth or recovery strategies. A reduced tax liability is also big news because it protects cash flow.”
David Morobe from Business Partners said it was now time for pragmatism to alleviate the flight of small enterprises.
“What has become evident is that the finance deployed under the scheme’s 2021 iteration did not filter through sufficiently to small businesses. Our hopes are that the new bounce-back scheme will deliver what it has promised.”
The Southern African Venture Capital and Private Equity Association said it was pleased about the new business bounce-back scheme.
“The loosening of criteria for small business loan guarantees and increasing the participation to non-bank financial institutions to provide loans and equity-linked loan guarantee support should stimulate SME growth.”