That’s according to a report based on data from the South African Future Trust, an organisation that provided financial support to small businesses that were hit by the pandemic in the form of a five-year interest-free loan. File photo.
DURBAN, September 9 (ANA) - Small, medium and micro enterprises (SMMEs) in South Africa have survived the financial ramifications of the Covid-19 pandemic but, while they are optimistic about the future, they remain vulnerable to economic shocks, such as those caused by lockdown restrictions and the recent civil unrest in parts of the country.
That’s according to a report based on data from the South African Future Trust, an organisation that provided financial support to small businesses that were hit by the pandemic in the form of a five-year interest-free loan.
The trust was backed by a R1-billion donation from the Oppenheimer Generations Foundation.
Survey data was based on the responses of loan recipients. Of the 9,656 businesses surveyed, 2,849 responses were received, said co-author of the report and social investment associate at Oppenheimer Generations Philanthropies Ashleigh Fynn-Munda.
Forty-three percent of the responses were from women-owned businesses, with the remaining 67% owned by men.
It showed that 2,772 (97%) of respondents remained operational at time of survey and the majority expect total turnover and profit before tax to increase by the end of 2021. Of those that closed, 44% were women-owned and 55% were owned by men.
Sixty-nine percent of the respondents said they have less than one month’s savings accessible.
“In assessing the SA Future Trust’s role in supporting these SMMEs through the Covid-19 crisis, it is interesting to note that, for at least 50% of respondents, the SA Future Trust loan was the only relief they reported to have taken up,” said Fynn-Munda in a statement on Thursday.
She said the loan was available to qualifying SMMEs with an annual turnover of less than R25 million, but 71.84% of the loan holders were made up of micro businesses with fewer than 10 employees and a probable turnover of between R5 million and R20 million (about US$350,000 and US$1.4 million) per year.
The report also showed that most respondents felt their debt-servicing costs would decrease by the end of the year, but they will need to start operating more efficiently if they are to return to sustainable growth, according to co-author and deputy director of research at the Brenthurst Foundation, Dr Emmanuel Owusu-Sekyere.
“At the same time, the survey has clearly revealed the need for further funding and access to working capital or grant capital, from organisations like the SA Future Trust, if small businesses are to fulfil their potential as the backbone of our economy and one of the main contributors to job creation,” Owusu-Sekyere said.
ANA
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