2018 Minister of Communications Stella Ndabeni-Abrahams

Minister admits funding set aside to assist small businesses impacted by riots and looting is not enough

The Minister of Small Business Development Stella Ndabeni-Abrahams on Tuesday told Parliament’s select committee on trade and industry, economic development, small business development, tourism, employment and labour that her department has written to national Treasury to request for an increase to the funding set aside to assist small businesses that were impacted during the July riots and mass looting.

Ndabeni-Abrahams admitted to the committee that the R300 million her department had allocated to assist these businesses was not enough.

The minister said the funds were reprioritized from the department’s Business Viability Programme (BVP) which had been moving at a snail’s space and still had unspent money in its kitty.

The BVP, however, is ongoing and has since picked up its pace in terms of implementation, the minister said.

The department’s business recovery programme for businesses operating in the formal and informal sectors who were affected by the riots and looting in July will not provide assistance to businesses owned by foreign nationals, Ndabeni-Abrahams said, adding that the department of trade, industry and competition (DTIC) would assist the latter businesses.

“The criterion has been eased [because] it’s not about red tape but there are things we can’t compromise on,” the minister said, givingng an example that these included that potential beneficiaries should have bank accounts or be willing to open one up.

A bank account is necessary to ensure that the the Financial Intelligence Centre Act (FICA) is complied with and so that the Auditor-general, should the need arise, would be able to follow the paper trail, the minister added.

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The CEO of the Small Enterprise Finance Agency (Sefa) Mxolisi Matshamba said funding will be provided to persons who are South African citizens by naturalization and who are also in good standing with the revenue service (Sars).

Matshamba said Sefa is working with the Industrial Development Corporation (IDC) and the national empowerment fund (NEF) with implementing the recovery programme and that cases of business owners submitting duplicate applications at different agencies have been picked up.

“And we are going to contain that, honourable members, because that is fraud,” Matshamba assured, adding that it would also amount to some kind of fraud if an applicant receives a payout from a private insurer and also claims from the programme.

In such an instance, Matshamba said, the grant component of the funding would then be converted into a loan, the Sefa CEO added.

ALSO READ: R300 million allocated to assist small businesses impacted by rioting and mass looting

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