DURBAN - ORGANISED business in Durban has set up a special insurance task team to help revive uninsured small businesses following the recent civil unrest.
This comes in the wake of an independent survey that has revealed that 89 percent of affected businesses were the small, micro and medium enterprises (SMMEs).
The non-profit research company BeyondCOVID found that SMMEs, the sector that generated more than 70 percent of jobs in a country where nearly a third of the population was unemployed, stood to lose a staggering R3.4 billion a month in revenue while they were out of business.
“They will also need at least R16bn in operational funding to recover. Already battling with access to markets and affordable funding during the Covid-19 pandemic, many small businesses now face a 63 percent drop in revenue since looters ran rampant through the streets,” the survey revealed.
“For many small businesses, already brought to their knees by the pandemic and economic uncertainty, reopening their doors after recent events will be a considerable challenge,” stated the report, which also revealed that 62 percent of impacted small businesses did not have business insurance, and of those that have closed their doors in recent weeks, only 5 percent have business interruption insurance.”
The Durban Chamber of Commerce and Industry (DCCI) said: “We are deeply concerned as many SMMEs contribute significantly to the economic prosperity of South Africa,” said Nigel Ward, the president of the chamber.
“These businesses are reliant on monthly income to sustain operations. They have no access to additional capital to ride out the recent disruption and no business insurance cover. The (chamber) is working on several initiatives … that are aimed at supporting SMMEs during this time, especially the businesses that do not have insurance,” said Ward, who explained that the insurance task team would assist the ailing enterprises to recover and added that requests could be shared with the chamber via [email protected].
Other initiatives included providing “one-to-one coaching” to members of our business community.
There was also a “KZN Resource Tracker” initiative, a tool aimed at connecting victimised businesses with recovery resources.
While the chamber welcomed the R2.3bn package announced by Finance Minister Tito Mboweni as a lifeline specifically targeted at the uninsured small enterprises, Ward called for the criteria for distributing the funds to be “inclusive and accommodate informal traders and township businesses”.
“We are calling on the government to provide support to the SMMEs so we avoid a humanitarian crisis, where the unemployment numbers will increase, crime statistics will increase and more importantly poverty will increase,” said Ward.
The departments of Trade, Industry and Competition and Small Business Development have said the cabinet was busy putting final touches on a package to assist the small business sector.
“SMMEs and informal traders continue to be an important safety net in job security and the onus is on communities and government to protect the ongoing operations of these businesses. Cabinet has decided that all business licences and permits that expired between March 2020 and June 2021 will remain valid until 31 December 2022,” the departments said in a joint statement.
“New business licences or permits that are issued from the 1st of July will also be valid until 31 December 2022, and no licence fee will be payable. Business licences and trading permits which were due for renewal 6 (six) months before the declaration of level 4 regulations as gazetted, are not covered in terms of this directive.
“The directive also allows for the operation of businesses by new entrants whose applications for either business licence and/or trade permits are hampered by the unavailability of the relevant authorities empowered to issue such licences and/or trade permits. Given the job losses the country has been experiencing, it will further remove the fees that are a barrier for people who want to start new businesses,” read the statement.
DTIC spokesperson Bongani Lukhele said the economic cluster departments were still finalising how the rescue package would be rolled out.
THE MERCURY