South Africa extends loans for small & medium-sized businesses amid coronavirus pandemic

According to reports, South Africa has doubled the duration of loans by making it six months to small and medium sized businesses which are hit by the coronavirus pandemic. This will help them survive the recession that the pandemic has brought as its consequence. The government has also made other changes to make the credit easier to access. 

South Africa battles Coronavirus

In April, President Cyril Ramaphosa announced a 200 billion loan scheme to help businesses. This was a part of the stimulus measure to stop the economy from coming to a standstill due to the coronavirus pandemic. The purpose of the loan was to meet urgent requirements such as salaries and rents. Contractual obligations were also made a part of this loan. 

South Africa’s economy had come to a standstill when the government imposed lockdown to fight the coronavirus pandemic. This had a direct impact on the medium and small sized businesses. The businesses lost almost all their revenues and many struggled to recover even after the lockdown was lifted.

Read: South African Police Disperse Protesters Over Lockdown Pain

According to the treasury, the new changes that were introduced also included “bank credit assessments and loan approvals more discretionary and less restrictive”. They have also extended the drawdown period and the interest and capital repayment holiday to six from three months. Also, the government replaced the 300 million rand turnover cap with a maximum loan amount of 100 million rand.

South Africa is the country with the world’s fifth highest number of COVID-19. Its response to the COVID-19 cases is flawed by corruption allegations around its historic $26 billion economic relief package. President Cyril Ramaphosa has announced a wide-ranging investigation into the same. South Africa is seen as the best-prepared country in sub-Saharan Africa to battle the novel coronavirus. However, years of uncontrolled corruption have weakened institutions, including the health system.

Read: Three Members Of South African Women Squad Test Positive For COVID-19

Also Read: South Africa Warns COVID-19 Corruption Puts 'lives At Risk'