Government to table new bill aimed at helping small businesses in South Africa

Small Business Development minister Khumbudzo Ntshavheni says that she plans to table the Small Enterprise Ombudsman Services Bill shortly.

Presenting her budget vote speech in a virtual parliamentary meeting on Tuesday (28 July), Ntshavheni said that the aim of the bill is to provide a more affordable dispute resolution and arbitration mechanism

“South African small enterprises lose billions of rands annually due to late and non-payment by both government and the private sector.

“During the lockdown, if government and big business had just paid the amounts due to SMMEs on time, the bulk of the demands for support would have been delayed,” she said.

“The non-payment has resulted in some small enterprises closing down because they have no appropriate, effective and efficient mechanism to use to resolve disputes such as non-payment.”

Ntshavheni noted that going to court is still a prohibitive proposition for small enterprises, even where there are large amounts of money involved.

“The process is cumbersome, time-consuming and, of course, expensive. We firmly believe that the Small Enterprise Ombuds Service remains a necessity even in the new normal.”

Database

Ntshavheni said that the Covid-19 pandemic also assisted her department in fast-tracking the implementation of the SMME Database – now known as SMME SA platform.

She said that the platform allows small businesses to apply for support online while also assisting ‘government traceability’ of support provided to SMMEs and co-operatives.

“SMMESA is an interactive tool that will also assist us in curbing double dipping whilst positioning us to introduce trade exchange for SMMEs in the e-commerce field to latch-on as part of deepening online trading.

“The same database has been linked with SARS, CIPC and we are in the process of linking it with other organisations which include UIF and Centralised Supplier Database.”

The database, once complete, will also serve as a one-stop platform, said Ntshavheni.

“To date over 200,000 SMMEs across all sectors of the economy have registered and use the platform.

The next phases of the platform include linking SMMESA to the global value chains through both the EU platform, the International Trade Centre and it should also be able to link to the Africa Medical Supplies platform.

Debt relief

Commenting on the coronavirus debt relief provided by her department, Ntshavheni said that the SMME Debt Relief Facility had mobilised R530 million to date.

Ntshavheni said that this was a ‘soft loan’ aimed at keeping existing businesses afloat during the Covid-19 pandemic whilst averting loss of jobs in the economy.

“This facility is assisting the majority of SMMEs and Cooperatives who were experiencing severe reduction in demand and subsequent reduction in revenues due to the pandemic.

“Due to budgetary constraints, the facility offers working capital only, strictly direct costs which should be auditable to a maximum of R350,000.”

“Those who applied were assisted with utilities bills, rental payments and some with salaries and this is just before we could finalise our agreement with the UIF to assist all those that needed payroll assistance.”

Ntshavheni said her department has committed to pay all claims that are with us by the end of July. She added that the fund was able to assist 1,497 small businesses, thereby preserving 21,421 jobs.


Read: Poor choices have caused permanent damage to South Africa’s economy: economists

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Government to table new bill aimed at helping small businesses in South Africa