Big businesses should pay their small and medium counterparts within 30 days to encourage entrepreneurship and job creation, Business Unity SA (Busa) said on Wednesday.
“Busa calls for better co-operation between big and small business to reduce the turnaround time for payments to, particularly, small and medium manufacturing enterprises (SMMEs)...,” the organisation said in a statement.
Busa suggested a 30-day turnaround time.
“Ensuring greater consistency in paying SMMEs on time, in shorter cycles, and opening opportunities for them to provide manufacturing inputs to larger manufacturers will be a valuable step in encouraging vigorous entrepreneurship.”
Busa said South Africa had one of the lowest entrepreneurship activity rates globally. SMMEs needed to be encouraged, as these businesses were more likely to create jobs.
“A report produced by FinMark indicates 43 percent of all private sector jobs in South Africa are created by SMMEs. Most countries reduced unemployment via substantial efforts to encourage self-employment,” Busa said.
It had set up a task group on SMMEs that would consider issues like how to strengthen the partnership between the state and the private sector, to make it easier for small businesses to borrow money. - Sapa