This archive report was first published on 14 May 2020.
On May 14, 2020, the South African government announced a plan to rescue distressed businesses affected by the COVID-19 pandemic. The R500-billion ($27 billion) stimulus plan includes R200 billion for companies with a turnover of less than R300-million ($16.5 million) a year to help pay salaries, thereby supporting 700,000 firms and more than 3 million employees.
The plan allows MSMEs to repay loans taken for coronavirus mitigation over a period of five years. For the first three months, companies will not have to pay anything back to the banks. The loans will meet short-term financial, contractual obligations, rent, and maintenance.
The participating banks include Absa, First National Bank, Investec, Mercantile Bank, Nedbank, and Standard Bank. The Treasury also gave a breakdown of the more than R5 billion in support to municipalities to assist them in responding to the COVID-19 pandemic in the 2019/20 municipal financial year.
Additionally, the Treasury revealed that it would table a new budget on June 24 to ratify plans for the stimulus package. The budget aims to ease the economic impact of the coronavirus outbreak.
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