‘White boys’ club still benefits from COVID-19 scheme
Black business organisations are up in arms over the criteria used by banks to approve loans for the multibillion-rand COVID-19 scheme meant to assist distressed businesses. The scheme has gotten off to a slow start with just R7-billion of the R100-billion set aside having been dispersed so far.
The Reserve Bank (SARB) has offered funding for small and medium enterprises (SME), starting at R100-billion, with an option to scale up to R200-billion over time. The facility is backstopped by a guarantee from National Treasury. However, the scheme has faced a plethora of challenges.
The National Treasury, the Banking Association of South Africa and the SARB said banks have approved just over R7-billion in loans for 4 800 qualifying small businesses since the COVID-19 loan guarantee scheme was launched in the middle of last month.
Banks have received 29 700 applications for COVID-19 loans and 5 200 applications were rejected because they did not meet the eligibility criteria for the loan, as set out by the Treasury and the SARB.
A further 5 400 applications were declined because they did not meet the risk criteria. Nafcoc secretary-general Steve Skhosana said he was not surprised at the low uptake of the loans.
“The criteria used by banks doesn’t favour our members who are black entrepreneurs,” said Skhosana.
“Government misled us when they announced this scheme; we thought all businesses who have been affected by COVID-19 would be able to benet from the scheme, but clearly it is business as usual as the same white boys’ club would be the ones benefiting.”
Treasurer general of the Black Business Council (BBC) Bonolo Ramokhele said: “The scheme is not assisting black owned businesses currently as the vast majority of our members who have applied to the various banks have not been successful in accessing funding under the scheme.
We have also not seen any movement in the inclusion of BBC in a steering committee that does monitoring and evaluation of the scheme together with National Treasury, the SA Reserve Bank and the Banking Association.”
“The scheme in our view seems to have been designed for the elites and businesses that were entrenched clients of the commercial banks prior to lockdown and has not been designed for the benet of black owned businesses hence there is a need for an intervention to make the scheme workable for SMMEs.”
