China News Service, March 15. According to the "Africa Times" WeChat official account, the South African government is launching a new loan program aimed at supporting South African companies facing difficulties due to the new crown epidemic.
In a statement on March 14, the presidential palace said the program will be officially launched on April 3, and will allow small businesses to banks and other lenders to apply "bounce" loans.
Finance Minister Enoch Godonwana said in his budget speech in February that the plan would use two mechanisms introduced in sequence.
First, there will be R15 billion in loan guarantees for small businesses through participating banks and development finance institutions.
“This allows eligible non-bank SME loan providers to participate. The government will work with the loan providers to insure the first 20% of losses for banks and other eligible SME loan providers. Eligibility criteria, including collateral Requirements, have been relaxed. The mechanism will be up and running in April.”
Second, before April 2022, the government plans to introduce a corporate equity-linked loan guarantee support mechanism.
“We intend to increase the total support scheme to R20 billion through the 'Bounce Back' scheme. The equity support mechanism for the scheme will be through the development finance institution DFI. It will also be available to eligible non-bank SME finance providers," Godonwana said.
The South African government will spend R721 billion over the next three years to promote faster and sustained inclusive economic growth to tackle unemployment, poverty and inequality.