Perhaps only the chronically out-of-touch department of small business development would have been surprised by a study released this week that found that 42% of small businesses closed during the lockdown.
The study, conducted by Finfind and supported by several government departments, analysed data from 1,489 SMMEs.
Let’s hope officials take the findings to heart, as they show that despite the government’s talk of "helping small businesses through the crisis", many closed because they ran out of cash, and the "relief" didn’t get to them. Of those that closed, nearly half applied for Covid-19 relief, and 99% of the applications were rejected.
In all, 58% said their biggest problem was that they couldn’t access funding. "Lenders need to review their ‘one-size-fits-all’ methodology of assessing credit applications as the majority of SMMEs, especially at a time like Covid, will not pass this test," the study said.
For a government that often comes across as hostile to business and seems to think companies will carry on whatever destructive policies are put in their path, it should be a bracing wake-up call. This is, after all, the sector often held up as the greatest hope for arresting SA’s 30% unemployment rate. Yet, as soon as the pandemic hit, small businesses found themselves abandoned.
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