Government measures in key jurisdictions 2nd edition final pages - Flipbook - Page 82
South Africa
Janene Meiring | jmeiring@werksmans.com | +21 809 6159
Contributor: Werksmans
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Loans and
financial
support
Has the
government put
in place any new
bank funding
schemes?
•
Both the Government of the Republic of South Africa (“RSA”) and the private sector
have introduced a number of financial schemes aimed at assisting businesses, in
particular small and medium sized enterprises (“SMMEs”), negatively affected by
Covid 19. These schemes are being updated from time to time.
•
The Government has created a number of Covid-19 loan funding schemes which are
specifically aimed at SMMEs generally (annual turnover restrictions are dependent
on the industry), namely the:
– SMME Debt Relief Finance Scheme – this scheme is available to SMMEs in order to
assist them with existing debt repayments, acquiring raw materials, paying labour and
other operational costs, and
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– SMME Business Growth / Resilience Facilities – this scheme is available to SMMEs
classified as ‘essential services’ assisting in producing or supplying ‘essential
goods’ during the lockdown.
•
Certain industry specific schemes have also been introduced, such as the:
– Spaza Shop Support Scheme aimed at spaza shop owners and general dealers
selling essential goods,
– National Department of Sports, Arts and Culture Relief Fund aimed at practitioners
in the fields of arts, culture, sports and recreation,
–COVID-19 Tourism Relief Fund and Agricultural disaster support fund for
smallholder and communal farmers. This fund provides grant of up to R50,000,
– Industrial Development Corporation (IDC) Assistance and IDC MCEP Covid-19
Programme, which provide funding to businesses for the acquisition or
manufacturing of essential medical supplies, and
– National Empowerment Fund Black Business Funding Solution, which provides loan
funding to black owned SMMEs which manufacture medical products.
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•
The Government has recently announced the Covid-19 DTI Relief Fund, which will
provide R3 billion in relief funding to vulnerable businesses involved in the battle to roll
back Covid 19. This fund is not restricted to SMMEs only. Of these funds, R500 million
has been allocated for importing medical products and R700 million for financing
equipment and working capital requirements.
•
In addition to the Government funds which have been in place, a Solidarity Fund has
been created (to which the public can donate), a number of prominent business men
and women have created dedicated funds and banks have offered certain reprieves to
clients (e.g. payment holidays).
•
The South African Reserve Bank has also reduced the repo rate (with reference to which
bank lending rates are determined) on a number of occasions since the start of the
Covid 19 crisis.
Government measures in key jurisdictions
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