https://www.engineeringnews.co.za
Africa|Business|Cutting|Financial|Resources|Services|Operations
Africa|Business|Cutting|Financial|Resources|Services|Operations
africa|business|cutting|financial|resources|services|operations

RMB aims to ‘keep the wheels of the economy turning’ by assisting SMEs

2nd April 2020

By: Simone Liedtke

Creamer Media Social Media Editor & Senior Writer

     

Font size: - +

Banks, businesses, government, regulators and the broader financial services sector need to pull together like never before in a constructive partnership to help guide South Africa through what will be an extremely difficult economic period, the full scale of which is as yet unknown, Rand Merchant Bank (RMB) CEO James Formby said in a statement on April 2.

RMB is engaging with many of its corporate clients to assess their needs, in efforts to assist them to “keep the wheels of the economy turning” despite the constraints.

Formby added that “it is vital for all South Africans that our corporate sector remains open for business even if it’s not business as usual”.

As such, RMB will offer additional funding, short-term covenant waivers and also evaluate businesses’ capital structures to help enable them to withstand the longer-term effects of Covid-19.  

“It’s important to help companies look critically at their operations and cash flows now and some months ahead rather than just encouraging them to borrow more which may create more pressure in the future,” Formby added. 

He noted that while the response of South Africa’s banks was so far constructive, it “was clear that a coordinated and much broader response was necessary”. 

“The challenge to the economy will only be overcome if government, regulators, the broader financial services industry and business work together in partnership. There are very encouraging signs that this is already happening. We need to get to the other side of this crisis with businesses that are strong enough to help the economy grow again.

According to Formby, the South Africa Reserve Bank’s intervention in the bond markets last week helped improve liquidity and brought some stability to markets. Cutting the repo rate by 1% was also “very welcome,” he said, adding that “it was the responsibility of all financial market participants to keep the debt and equity markets functioning especially as the country’s reputation was on the line”.

Formby said the crisis would affect different industries in different ways and that the full impact of the shock to the economy would only be fully revealed over time.

He also called on all businesses to pay staff and suppliers if they could, to ensure the economy did "not freeze up” and to allow businesses, particularly smaller businesses with more limited resources, to sustain normal operations as much as possible. 

In this regard, RMB has prioritised early invoice settlements for suppliers.

Across the FirstRand Group over R1-billion has been processed in the last few days. 

RMB remains committed to continue expediting payments to local suppliers to help improve their financial stability. This liquidity injection will also benefit the small and medium enterprise sector, which is instrumental in sustaining ongoing economic activity.

Formby’s comments follow the announcement earlier this week that FirstRand had established the South African Pandemic Intervention and Relief Effort (Spire), which aims to assist government and its partners in mitigating the impact of Covid-19.

FirstRand has so far allocated an anchor investment of R100-million to Spire, funded by the FirstRand Foundations, FNB and RMB.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

Comments

Showroom

Werner South Africa Pumps & Equipment (PTY) LTD
Werner South Africa Pumps & Equipment (PTY) LTD

For over 30 years, Werner South Africa Pumps & Equipment (PTY) LTD has been designing, manufacturing, supplying and maintaining specialist...

VISIT SHOWROOM 
Weir Minerals Africa and Middle East
Weir Minerals Africa and Middle East

Weir Minerals Europe, Middle East and Africa is a global supplier of excellent minerals solutions, including pumps, valves, hydrocyclones,...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.242 0.296s - 144pq - 2rq
Subscribe Now