There are a number of lessons and insights that were learned from supporting small and medium-sized enterprises (SMEs) during the pandemic, including what needs to be done to gear the country towards an enabling environment for these entities to thrive, speakers said during a webinar hosted by industry body the Small Business Institute (SBI) on July 7.
Business finance provider Business Partners MD Ben Bierman outlined that the company had gleaned a number of insights from the execution of its Sukuma Relief Programme, which provides financial assistance and aid for SMEs negatively impacted by Covid-19.
These findings include that reliable, relevant information was critical and that accessibility is essential for SMEs.
Moreover, uncertainty created desperation, he noted.
Therefore, “normal” lending conventions were irrelevant during this time.
He added that public or broad offerings resulted in stress points and emphasised that organisations offering funding must be ready to change requirements while executing these.
Bierman also mentioned the relief programme showed that many good SMEs did not qualify for funding, yet were “fundable” entities. This raised questions about whether lending criteria were too onerous.
Further, Bierman said it had been found that there is considerable value in being a good corporate citizen; that information sector is vital; and that there is a need for leadership, coordination and collaboration.
He outlined that too many SMEs had closed throughout the pandemic.
However, on a more positive note, he indicated that well-led businesses were bouncing back, servicing current obligations and slowly addressing arrears, with the owners of these businesses having taken decisive actions in crisis.
Bierman said one industry that required more support was the hospitality industry. To this end, he said, Sukuma is undertaking a restart programme to assist, with several transactions already approved.
Bierman also emphasised the need for the SME sector to be ready for the future.
In this vein, he highlighted the need for closer, more effective coordination and collaboration between government, civil society and the private sector.
Moreover, there should be sectoral-specific plans, for example, that cater to hospitality, personal services and manufacturing, among others, he said.
Meanwhile, Small Enterprise Finance Agency CEO Mxolisi Matshamba noted that, while a considerable number of South Africans were keen to pursue entrepreneurship as a career, the rate of business continuation in the country was worrying.
He said the biggest challenge facing SMEs was government delays in paying invoices timeously.