A new initiative, #PayIn30, has been launched in an effort to ensure that small and medium-sized businesses (SMEs) in South Africa are paid within 30 days.
#PayIn30 is spearheaded by Business for South Africa, the SA SME Fund, and Business Leadership South Africa and supported by, among others, Business Unity SA, the Small Business Institute and the Black Business Council.
About 2.5 million SMEs account for 10.8 million jobs in South Africa. Transunion data points to 6.4 percent of formal SMEs going into bankruptcy (up 50 percent from last year), with 260 000 jobs lost and another 240 000 at risk as they struggle amid the economic fallout from Covid-19.
With a tightening economy, the banks’ payment holidays coming to an end, and the winding down of the Temporary Employer/Employee Relief Scheme, this was expected to rise to between 10 and 15 percent of small businesses going into business failure next year, with almost a million jobs lost and at risk.
“Covid-19 has made this problem worse,” the business groups said.