Government measures in key jurisdictions 3rd edition final - Flipbook - Page 110
Janene Meiring | jmeiring@werksmans.com | +21 809 6159
Loans and
financial
support
Has the
government put in
place any new
bank funding
schemes?
•
Both the Government of the Republic of South Africa (“
”) and the private sector have
introduced a number of financial schemes aimed at assisting businesses, in particular small and
medium sized enterprises (“
”), 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
– 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.
110
•
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 capitalrequirements.
•
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