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Treasury launches bounce-back support scheme for SMEs

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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.

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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.

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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.

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