Debt relief fund for SMEs amid Covid-19 pandemic

The government will be assisting small businesses impacted by the coronavirus via a debt relief fund.

This follows President Cyril Ramaphosa declaring a state of national disaster in response to the Covid-19 global pandemic.

To mitigate the impact of the expected economic slowdown on small and medium enterprises (SME) in the country, the Department of Small Business Development said it’s finalising an SME support intervention comprising of Debt Relief Fund and Business Growth/Resilience Facility.

“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,” it says.

“This facility will also assist entities to acquire raw material, pay labour and other operational costs. All these interventions will be structured to match the patterns of the SMEs’ cash flows, as well as the extent of the impact suffered.”

The department has requested the MECs responsible for economic development in all provinces to support it to ensure the widest reach of SME support.

For small businesses to be eligible for assistance under the Debt Relief Fund they must demonstrate a direct link to the impact or potential impact of Covid-19 on their business operations.

Small businesses are requested to enrol at www.smmesa.gov.za. The site will go live on Tuesday, March 24, 2020.

“The department’s insistence on the use of the SMMESA database is based on the need to track, monitor and strengthen the impact of business development support to [small, medium and micro enterprises] by both government and the private sector during this period and beyond,” the department says.

It says it will be guided by the National Command Council in determining the sectors deemed severely impacted, in order to qualify for the Debt Relief Fund.

In future, the database will also be used to apply for both financial and non-financial support, access information about business opportunities and market access support.

It has been 15 days since the confirmation of the first Covid-19 case in South Africa.

Since Ramaphosa’s declaration on Sunday evening there has been a decrease in movement in South Africa, as schools closed on Wednesday and many companies have opted to work from home as a precautionary measure.

On Friday Health Minister Zweli Mkhize announced that 202 people in South Africa have been found to be infected with the coronavirus.

Mkhize says that between 60% and 70% of South Africans will contract Covid-19, of which 20% will be serious cases.