Govt establishes debt relief fund for small businesses hit by COVID-19 pandemic

Image credit: Twitter/Dept of Small Business Development

The government is finalising a small, medium and micro-sized enterprises (SMME) Support Intervention to help small businesses hit hard by the COVID-19 outbreak.

Minister of Small Business Development Khumbudzo Ntshavheni made the announcement in a statement on Thursday.

Ntshavheni said the Intervention will comprise a Debt Relief Fund and a Business Growth/Resilience Facility.

Debt Relief Fund

She added, “The Debt Relief Fund is aimed at providing relief on existing debts and repayments to assist SMMEs during the period of the COVID-19 State of Disaster.”

To be eligible for relief, small businesses must demonstrate a “direct link of the impact or potential impact of COVID-19 on their business operations.”

The Fund will also help small businesses to buy raw materials and pay labour, among other operational costs.

SMMEs requiring assistance will have to register on the SMME South Africa platform – http://www.smmesa.gov.za – which will go live on Tuesday, 24 March.

Business Growth/Resilience Facility

Ntshavheni said the Business Growth/Resilience Facility will support SMMEs operating in the supply value chain.

In particular, it will support SMMEs that “manufacture (locally) or supply various products that are in demand emanating from current shortages due to COVID-19 pandemic.”

She added, “This facility will offer working capital, stock, bridging finance, order finance and equipment finance, and the amount required will be based on the funding needs of the business.”

Applicants will similarly be required to register on the SMME South Africa platform that will launch on 24 March.

The COVID-19 pandemic, which is caused by coronavirus, is expected to slow South Africa’s economy further following a recession in the last two quarters of 2019.

As of Thursday, the number of confirmed cases of COVID-19 in South Africa stood at 150. Health Minister Dr Zweli Mkhize said he expected the figure to rise to around 200 by Friday.

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