JOHANNESBURG (Reuters) – South Africa has doubled the length of loans to small and medium-sized businesses to six months to help them survive the COVID-19 recession and has made other changes to make it easier to access credit , the Treasury announced on Sunday.
President Cyril Ramaphosa announced the 200 billion rand ($ 12.00 billion) loan program in April to help businesses, as part of stimulus measures to mitigate the impact of the pandemic on the economy already in decline of South Africa.
Loans are intended to meet urgent needs, such as salaries, rents, and contractual obligations.
Many small and medium-sized businesses in South Africa were in disarray when the government instituted a lockdown in late March in an attempt to contain the spread of the novel coronavirus that causes COVID-19.
They lost much of their income but still faced fixed costs, and many struggled to recover even as the lockdown was lifted.
Sunday’s changes to the program include making “bank credit ratings and loan approvals more discretionary and less restrictive,” the Treasury said in a statement.
They extend the drawdown period and the interest and principal repayment holiday to six instead of three months and replace the R300 million turnover cap with a maximum loan amount of R100 million.
($ 1 = Rand 16.6705)
Reporting by Tim Cocks; edited by Barbara Lewis
