Business Debt Relief: Here Are the Steps Taken in South Africa So Far
Right now, many people are rightfully concerned as to what the foreseeable future holds. While there is little doubt that we will overcome the challenge faced by people around the globe, the next few months seem very daunting while we disrupt every aspect of life as we know it to fight the onslaught of the novel coronavirus and the spread of COVID-19. The impact of this disruption is specifically harsh on small- and medium-sized businesses, as well as service providers like real estate agents. With income dwindling, many ventures are requesting measures to provide business debt relief in order to survive. As uncertainty is the enemy, we have rounded up what business debt relief measures have been announced in South Africa so far:
The Department of Small Business Development in South Africa has announced the establishment of a debt relief fund for small businesses to help them weather the detrimental effects of the coronavirus pandemic. The fund aims to provide qualifying businesses with relief on existing debts and debt repayments in the case of the economy slowing down.
“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”, Minister Khumbudzo Ntshavheni said in a statement.
For a business to be eligible for assistance, they must be able to demonstrate a direct link of the impact of COVID-19 on their business operations. Applicants can register their need on the SMME South Africa portal.
Private Sector Initiatives
Nedbank has announced both individual and business debt relief measures in the form of payment holidays, extended loan periods for existing loans, and the extension of additional credit to manage short-term cash flow shortfalls.
FNB is in the process of engaging with the Banking Association of South Africa (BASA), the South African Reserve Bank and the government on a variety of solutions to help support small- and medium-sized businesses across the country. However, they are yet to announce the details of the business debt relief measures they will be implementing.
While the future is uncertain, we urge everyone to stay calm and be responsible. Practice social distancing and let’s work together to beat the spread of the coronavirus.