In an effort to ensure small and medium sized businesses (SMEs) in South Africa survive the economic crisis, exacerbated by the COVID-19 pandemic, more than 50 large companies have formally committed to paying their SME suppliers in 30 days.
The initiative, called #PayIn30, is spearheaded by Business for South Africa (B4SA), the SA SME Fund, and Business Leadership South Africa (BLSA), and supported by, amongst others, Business Unity South Africa (BUSA), the Small Business Institute (SBI) and the Black Business Council (BBC).
The recession and pandemic have had a devastating impact on the approximately 2.5 million SMMEs accounting for 10.8 million jobs. Transunion data points to 6.4% of formal SMEs going into bankruptcy (up 50% from last year), with 260 000 jobs lost and another 240 000 at risk. With a tightening economy, the benefits of the banks’ payment holidays coming to an end, and the winding down of the Temporary Employer/Employee Relief Scheme (TERS), this is expected to rise to 10-15% of small businesses going into business failure next year, with almost a million jobs lost and at risk.
Read more: B4SA Press Release 17 November 2020