Wednesday, 25 August 2021 - Address by the Minister for Small Business Development, honourable Stella Tembisa Ndabeni-Abrahams (MP), on the occasion of debate on the recent public violence, looting and destruction of property: “peace, stability and rebuilding beyond the public violence, looting and destruction of property”.
Other Presiding Officers of the House,
Ministers, deputy ministers and MECs,
Honourable Members and members of the public watching this important debate
Allow me to express my appreciation for being afforded an opportunity to be part of todays debate. Hon Members 46 days ago our beautiful country went through a painful, traumatic and devastating experience that in a space of seven days from the 9th to the 18th of July many households lost income and breadwinners lost jobs. This comes after buildings were burnt down, shops looted and people died. We remain grateful to those individuals that defended our country and those that are helping us to rebuild our nation.
It is well documented that South Africa faces major social, political, and economic challenges. Our country has not emerged from the social injustices of the past and has witnessed the starkest examples of inequality on the globe. During the month of July, these challenges were further exposed and affected the quality of lives of thousands on South Africans, particularly small businesses. Amid fighting a pandemic, South Africa was engulfed in social unrests which took place predominantly in KwaZulu-Natal and Gauteng. These unrests also had a devastating effect on small and micro-enterprises as well as informal traders which threatened and continues to threaten the livelihood of entrepreneurs, employees, suppliers and the entire SMME value chain. It is very unfortunate that others see an opportunity to play petty politics over this tragedy.
According to the South African Property Owners Association (SAPOA) and Business Leadership South Africa (BLSA), the estimated cost of the unrest on the economy is R1.5 billion losses in stock, R15 billion damage on property and equipment, more than 800 retail stores looted and 100 completely burnt. This has negatively impacted at least 50 000 informal traders and 40 000 businesses, placing 150 000 jobs at risk. The socio-economic ramifications of these statistics should be obvious to all. The urgency for decisive government intervention to assist and arrest the negative effects of these, cannot be more emphasised.
Indecisiveness could further destabilise our communities and result in prolonged periods of depravity, social decay, opportunistic and populistic hijacking of the crisis, school dropouts, and more dependence on social grants.
Fellow South Africans,
Cognisant of the urgency of the matters at hand, our portfolio has been working diligently to create significant support programmes focused on accelerating businesses and economic recovery with the view to curb job losses as well as closure of operating businesses.
We launched two business recovery support packages, the Business Recovery Support Programme and the Informal Traders Support Programme.
The business recovery support packages for small businesses are designed to provide special relief to those affected by the looting and unrest, providing them with an opportunity to apply for working capital (including stock), equipment (including vehicles for business purposes) and furniture, as well as fittings.
Small enterprises with existing funding from other lenders are also considered. With the unrest predominantly taking place in Gauteng and KwaZulu-Natal, preference is given to businesses in these provinces that have been dubbed as the epicentres of the unrest.
The Business Recovery Support Programme offers the following financial support:
- Blended Finance which is a combination of a grant (60%) and a loan (40%).
- Interest rate on the loan component is limited to 5%.
- Initial payment moratorium of up to 12 months for small enterprises in KwaZulu-Natal and Gauteng; and six (6) months for other Provinces.
- Repayment period of up to 5 years.
- Maximum funding accessible per entity is R2 million.
The programme solely funds businesses that are 100% owned by South African citizens, registered and compliant with the South African Revenue Service.
The Department requests that all small businesses that apply for this funding be registered on the National SMME Database: www.smmesa.gov.za. More information can be accessed also on Facebook (Department of Small Business Development or on Twitter @DSBD_SA. We have accelerated the implementation of the SMME database, encouraging SMMEs to apply online. To date, more than 240 000 unique SMMEs have registered on the platform. The system is based on integration to key government agencies and departments to ensure that data validation is achieved, improving the turnaround for the validation and completion of the process. We endeavour to ensure that this process is less bureaucratic and that the turn-around times are as expeditious as possible.
It is also important that the needs of the businesses are understood and that interventions are tailored, appropriate and sufficient. To this end, the package will correspondingly comprise of pre and post non-financial support offered by Seda. This will include small enterprises assisted to package their funding applications to access the funds available and customised business development support based on the needs of the small enterprises. Applications for the Business Recovery Programme can be emailed to BRP@sefa.org.za.
The business recovery support packages aimed at supporting informal and micro businesses in the informal sector include the provision of business focused financial and non-financial support. The Informal Traders Support Programme aims to support 17 667 entrepreneurs at R3 000 each as a once-off grant. The Business Development Support linked to the Programme is coordinated through SEDA. Businesses that apply through this scheme must be owned by South Africans but need not be registered with CIPC and SARS due to their size and status of operations.
This programme is not only limited to support SMMEs in the informal sector in the areas that were affected by the unrest but also open to the informal sector in general. Preference is given to businesses owned by women, youth and people with disabilities. email@example.com
The Department urges affected and qualifying small businesses and informal traders to take this opportunity and apply for the business recovery support programmes offered to ease the pressure and risk to closing their business while progressively elevating the economy during this difficult period. Given the magnitude of the challenges being faced by small businesses in certain areas and the mammoth task of rebuilding that lies ahead in those areas, time is of essence as applications will close on 30 September 2021.
Additional information on the qualifying criteria and registration may be accessed on our official websites at www.dsbd.gov.za; www.sefa.org.za; www.seda.org.za. Alternatively, SMMEs may get in contact with the Department by sending an e-mail with an enquiry to firstname.lastname@example.org or call 086 667 7867.
We continue to work with all South Africans to respond to this crisis and rebuild an SMME sector that is more resilient and sustainable. We call on the private sector and other stakeholders to partner with us in forging expeditious solutions to save our all-important SMMEs in affected areas. This could take many forms such as extended loans repayment period, new credit facilities, collaboration opportunities, rebuilding of facilities for these small traders, and other such interventions. We will be focusing on coordinating all government efforts towards support of SMMEs to ensure maximum impact.
As the Minister responsible for Small Business Development, I invite you to work hand in glove with the Department as we continue to reinforce our commitment to develop, support and promote small enterprises to ensure their growth and sustainability. Many of these small and medium enterprises provide employment and are a means of living to a significant number of fellow South Africans and we would like to be catalysts in preventing as much loss of livelihoods as possible.
I thank you!