On Wednesday 24 February 2021 Finance Minister, Tito Mboweni, delivered his 2021 National Budget speech in Cape Town. In the much-anticipated speech, everyone was interested to see how the government is planning to move forward with the economic recovery of South Africa especially following the pandemic. Of course, the pandemic was unexpected turbulence for the whole world, but now it is the time for our leaders to step up and show the attitude and resilience to get the country back on its feet!
We know that prior to Covid-19 our local economy was in an already frail state and the pandemic felt like the final nail in the proverbial coffin, especially for the SME sector of our country that has contributed hugely to our economy and continues to grow and will no doubt be a vital sector in our country’s economy for years to come.
While the annual budget speech is just a forecast of where the government proposes to allocate its funds, there have often been shortfalls. These unfulfilled promises have obviously left many feeling optimistic after the speech but are ultimately left reeling in despair.
The highlight of the budget speech in terms of Small and Mediums Enterprises was the allocation of R4 billion over the medium term to the township and rural enterprises, including blended finance initiatives, which is the strategic use of funds to mobilise private cashflow which benefits all parties involved. This announcement has been well received by many people involved in the SME sector, with many plauding this announcement as a brilliant initiative that will help grow businesses in these underdeveloped areas.
However, Secretary-General of the Black Business Chamber (BBC) Kaya Cishe said: “We as BBC have no confidence that such monies will finally reach SMMEs. As the minister was delivering his Budget speech there is about R1.8 billion which is a significant portion of the R2 billion that was previously allocated for a similar purpose, that is still sitting in the banks. We can only hope that this is not just an administrative exercise while SMMEs are closing as a result of the Covid-19 pandemic,” said Cishe.
Undoubtedly the biggest question on everyone’s mind is going to be the allocation of the funds and whether or not these small businesses will actually get the funding required to be to continue growing.
That is why alternative lenders, such as Payabill have become an integral part of the small business community. We recognize the importance of the SME sector and we thrive in helping small businesses across the country grow and reach their potential. Whether through our short-term local and international trade finance options or our short-term asset financing option, we have you covered and want to help your business reach new heights!
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