Swamped! R1bn Rupert-backed COVID-19 relief fund halts applications after 10 000 SMEs ask for help
08 April 2020 | Web Article Number: ME202018654
JUST days after applications opened for the Sukuma Relief Programme – an initiative aimed at supporting small and medium enterprises (SMEs) financially hit by COVID-19 – the fund has been oversubscribed, with applications for financial assistance far exceeding the current available capital of R1 billion.
This includes both completed applications and applications in progress.
Ben Bierman, Managing Director at SME risk finance company, Business Partners Limited, the appointed administrator of the fund, said the high number of applications that the programme received over the past weekend, as well as on Monday, 6 April 2020, was indicative of the crippling impact that the COVID-19 crisis is having on South African SMEs.
The combined value of the two applicant categories for the programme - the close corporations, companies and trust category and the formal sole proprietor category – exceeds R2.8 billion. “This exceeds the available donated capital of R1 billion almost three times over. As such, we have decided to suspend access to the application portal with immediate effect,” he said.
“We will now be using the next seven days to assess the applications received and provide feedback to the applicants. Should we thereafter find that there is still capital available, either because some of the applicants were not verified and approved, or because we have managed to secure additional capital, we will then open the Programme for applications again.”
Bierman said that none of the Business Partners clients would benefit from the Sukuma Relief Programme.
“We will announce a similar relief initiative for Business Partners clients over the next couple of days, for which we will use our own funds. None of our clients stand to benefit from the Sukuma Relief Programme, even though they might have applied to the programme. The overwhelming response we received dictates that Business Partners must assist its own clients, thereby potentially freeing up more capital for SMEs.”
He said the response represented a cry for help from South Africa’s SME sector. “Just three days after the online portal was opened for applications, the Programme has already received in excess of 10 000 applications from formal sole proprietors, close corporations, companies and trusts.”
Emphasising the grave need for additional capital to continue supporting the struggling SME sector, Bierman is now calling on big businesses and corporations to contribute funding to the Sukuma Relief Programme.
“We realised when engaging with our clients that the situation is dire, but we have been surprised by the sheer number of SMEs that are in desperate need of assistance.
“We unfortunately had to close the online application portal as the programme is already severely oversubscribed, and in keeping the portal open, we run the risk of not being able to meet expectations.
“As such, we are making a public plea to other big businesses that are looking to support local SMEs during this critical time. SMEs are the lifeblood of our economy and they are in need of financial assistance, now more than ever before, due to the COVID-19 pandemic. Now is the time to get involved and support each other.”