South Africa ’s Department of Small Business Development has launched its proposed debt relief fund to help reduce the impact of the economic shutdown caused by the coronavirus on startups, small, micro and medium enterprises (SMMEs). The country’s small business minister Khumbudzo Ntshavheni said that the fund is aimed at providing relief on existing debts and repayments.
“As the nation grapples with the impact of the Covid-19 pandemic, the department will be guided by the National Command Council in determining the sectors that are deemed severely impacted in order to qualify for the debt relief fund,” he said.
Read also: Ghana, South Africa, Nigeria Are Passing Tougher Laws To Regulate Uber, Bolt, Others
How South African Startups Can Benefit From The Fund
- According to Ntshavheni, for SMMEs to be eligible for assistance under the debt relief fund, the applicant must demonstrate the direct link of the impact or the potential impact of Covid-19 on business operations.
- The facility will also assist entities to acquire raw material, pay labour and operational costs. All these interventions will be structured to match the patterns of the SMMEs cash flows, as well as the extent of the impact suffered, he said.
- To strengthen monitoring and avoid abuse, businesses requiring assistance will be required to enrol on the SMME South Africa platform here.
This platform has now gone live today, Tuesday, 24 March 2020.
- The department plans also to allow these businesses to use the database in the future to apply for both financial and non-financial support, access information about business opportunities, and access market opportunities.
Some of the details which companies are required to share include:
- Annual turnover;
- Shareholders (including current BEE standing);
- Number of employees;
- Employee demographics;
- Sub-sectors
Launch Of ‘Business Growth/Resilience Facility’
- Also launched for startups and SMEs in South Africa is a new fund called ‘Business Growth/Resilience facility’ specifically created to enable continued participation of SMMEs in supply value-chains — particularly those which manufacture or supply items which are in demand due to the pandemic.
- According to the department, 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.
- To participate under this programme, startups and businesses are also asked to enrol on the SMME South Africa platform.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer.
He could be contacted at udohrapulu@gmail.com