Finance Minister Enoch Godongwana has launched a bounce-back scheme aimed at supporting SMEs struggling due to the Covid-19 pandemic.
This is a version of the R200-billion loan guarantee scheme launched by President Cyril Ramaphosa in 2020 at the start of the pandemic. It was part of the R500-billion stimulus package. About R17-billion of it was used. Godongwana says the scheme will use the two mechanisms consecutively.
“Government will partner with loan providers by underwriting the first 20 percent of losses for banks and other eligible small and medium loan providers,” the minister said. The eligibility criteria, including the requirement for collateral, has been loosened. This mechanism will be launched and operational next month.
Godongwana said details of the terms of the equity-linked guarantee mechanism will be provided soon.
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