The minister of small business development has slashed rumours that the coronavirus Debt Relief Fund will only assist majority black-owned businesses.
This follows the circulation on Monday evening of a fake Department of Small Business Development screenshot on social media. It stated that the fund set up by government to help alleviate the economic impact of the coronavirus on small businesses is intended for use by 51% black-owned businesses only.
Addressing the media on Tuesday morning, Minister of Small Business Development Khumbudzo Ntshavheni emphasised that all small businesses are eligible to receive financial aid.
“We are supporting all small businesses in SA,” she said, emphasising that this means businesses across racial demographics.
She added that the department will make sure the fund has demographic as well as geodemographic “spread”.
Government is establishing the fund with the help of the R2 billion donated by the Oppenheimer and Rupert families to assist small businesses.
Ntshavheni said businesses wanting to apply for funding assistance need to meet several criteria:
- They must be 100% owned by South African citizens
- They should employ at least 70% SA nationals
- They must be registered with the South African Revenue Service (Sars) and tax-compliant.
She said priority will be given to businesses owned by females, the youth and persons with disabilities.
To access the fund, businesses are required to register on the SMME South Africa platform.
However, the website, which was launched on Tuesday morning, provides very little detail on how small businesses will access the ‘solidarity fund’ mentioned by President Cyril Ramaphosa in his 21-day lockdown address to the nation on Monday evening.
It requires applicants to fill in the details of their shareholder/s as well as their employee demographics and whether or not they require financial assistance or non-financial assistance.
The website also fails to make provision for applications related to the tax subsidy or the temporary reduction in employer and employee contributions to the Unemployment Insurance Fund, and employer contributions to the Skill Development Fund.
Not ‘free’ money
Ntshavheni said businesses may apply for financing at an interest rate of prime minus five percentage points, which currently means 3.75% per annum.
She reiterated what Ramaphosa said on Monday night about suppliers that are trying to take advantage of the pandemic for personal gain through excessive pricing.
“Those who try to take advantage of the crisis will be punished with interest rates of prime plus 10 percentage points,” Ntshavheni said. This means chancers who abuse the system will have to pay 18.75% in interest per annum.
Non-SA citizen spaza shops will be closed
Ntshavheni added that during the lockdown only those spaza shops that are owned and run by South Africans are permitted to remain open.