South Africa’s National Treasury said it had met with the Black Business Council over concerns that a R200 billion loan guarantee scheme is not benefitting small, medium and micro enterprises (SMMEs).
Last month President Cyril Ramaphosa said the National Treasury, the South African Reserve Bank and commercial banks had jointly created a guaranteed loan scheme to help small and medium-sized businesses weather the economic storm caused by the Covid-19 pandemic.
In a statement on Thursday, the National Treasury said a recent meeting with the Black Business Council (BBC) had agreed to explore ways of ensuring that SMMEs that may not necessarily meet banks’ funding criteria were not excluded from relief funds.
It said a tripartite engagement between the BBC, the Treasury and the Banking Association South Africa would discuss proposals on implementation mechanisms, including possibly expanding the scheme to include new bank clients.
The BBC is the over-arching confederation that represents black professional, business associations and chambers and its primary purpose is to lobby the government on policy related matters and to play an advocacy role where policies are in place in order to accelerate the participation of black business in the mainstream economy.
“As the BBC, we advocate for the acceleration of the participation of black business in the mainstream economy and as such, any attempt to perpetuate the exclusion of the majority will be opposed,” BBC treasurer general Bonolo Ramokhele said.
Under the current guidelines of the scheme, Covid-19 loans are available from banks to eligible businesses in good standing with their commercial banks with an annual turnover of less than R300 million.
Funds borrowed through this scheme can be used for operational expenses such as salaries, rent and lease agreements and contracts with suppliers.
Banks are not obliged to extend Covid-19 loans, and those that do use their normal risk evaluation and credit-application processes.
Small scale South African businesses in particular have come under strain, with some facing collapse after the government enforced a nationwide lockdown from March 27 aimed at slowing down transmissions of the coronavirus ravaging the entire world.
Source: ANA
