local lockdown

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COVID-19: How to Save South African SMEs

The COVID-19 crisis has the potential to crush South Africa’s SMEs, but we can save small businesses if we act fast.

local lockdown

Photo: AdobeStock

The government is doing the best it can to curb the outbreak. President Cyril Ramaphosa and Dr Zweli Mkhize have acted decisively and leaders of different political parties appeared before the nation as one. Some corporates have switched their production lines to provide the goods we need most right now, like hand sanitisers and ventilators. 

And as much as COVID-19 has created a medical emergency, it has created an economic emergency, too. One that demands the same kind of unified, swift response. Because SMEs are our biggest employers, keeping them afloat must be our most urgent economic priority.

And, right now, SMES need a lifeline:

  • briefing note from the International Labour Organization estimates nearly 25 million jobs could be lost globally due to COVID-19. 
  • Another assessment predicts some South African SMEs will lose up to 60% of revenue over this crisis period.  

Even before the pandemic, SMEs needed funding to grow. According to a survey we conducted with hundreds of business owners earlier this year, 80% said they would need funding in 2020. In our Facebook community, business owners tell us the current situation is unsettling and the future uncertain. 

We can see the evidence of the tremendous need for funding all around us. 

When applications opened for Johan Rupert’s SME relief package, the fund was oversubscribed in three days. SMEs submitted 10,000 applications for R2.8 billion, exceeding the fund’s R1 billion available funding. Government, too, has put together a comprehensive support programme for SMEs. A few days after it opened, 81 000 SMEs registered on the Department of Small Development’s SME portal

These relief schemes will prevent the collapse of thousands of SMEs due to the coronavirus. But far more still remain at a loss. This is where fintech companies can get funds to businesses, quickly, securely, and at scale. Lulalend, and our peers, have the technology to assess and distribute funds to a large number of businesses within hours. 

For our part, we built our platform specifically for SMEs, and we have been funding thousands of South African small businesses over the years using automation and cutting-edge tech. We’re stepping up to do our part to support the COVID-19 crisis and we’re not looking for commercial gain. We want to help save SMEs. By accessing funds quickly, business owners can get through the lockdown and recover faster once it’s safe to start operating again.

If we don’t respond right away, many small businesses will not survive – breadwinners will lose their jobs, families will face increased hardship, and the most vulnerable South African citizens will be worst affected. We cannot afford this catastrophe, but if we work together, we can avoid it. The private and public sector has made a promise to SMMEs. We promised we would support them to grow the economy. We promised we would help them in their mission to create jobs. Now is not the time to default on this promise. It’s the time for competitors to collaborate. It’s time for the government to partner even more closely with the private sector.

South African SMMEs deserve a nationwide effort. I believe that if we join forces, we can keep more businesses open and more South Africans at work. Together, we are stronger. Together, we have real power to save South Africa’s SMEs. My door is open. I am ready to help get much-needed funds into the hands of South African small business owners today.