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Treasury launches bounce-back support scheme for SMEs

23rd February 2022

By: Marleny Arnoldi

Deputy Editor Online

     

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Finance Minister Enoch Godongwana has announced that the National Treasury will launch a new business bounce-back scheme to support small and medium-sized enterprises (SMEs) that remain in distress as a result of Covid-19 and related lockdown restrictions.

The scheme will use two mechanisms sequentially.

Firstly, small business loan guarantees of R15-billion will be facilitated through participating banks and development finance institutions. This allows access for qualifying non-bank small and medium loan providers.

The Minister says government will partner with loan providers by underwriting the first 20% of losses for banks and other eligible small and medium loan providers.

The eligibility criteria, including the requirement for collateral, have been loosened. 

This mechanism will be launched and operational in March.

Secondly, by April, the Treasury intends to introduce a business equity-linked loan guarantee support mechanism.

“We aim to bring the total support package through the bounce-back scheme to R20-billion.

“The equity support mechanism of this scheme will be facilitated through development finance institutions. It will also be available to qualifying non-bank small and medium finance providers,” Godongwana said.

Further details of the equity-linked guarantee mechanism will be provided soon.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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