Cape Chamber welcomes new private fund to help SMMES
In a remarkable alliance between a major United States Bank and the South African Government, JP Morgan and the Department of Trade, Industry and Competition (TIC) have announced a new R340 million fund to assist SA-based small and medium-sized businesses.
The programme will deploy financing support to qualifying firms particularly in manufacturing and the green economy through short, medium, and long-term finance over eight years. Interest rates will vary but are promised to be less than normal commercial bank levels.
In making this joint announcement it was clear that a major motivation for JP Morgan was enhanced BEE status, plus the opportunity to encourage specifically black entrepreneurs.
Some will note that the Minister of the TIC is a committed member of the South African Communist Party, an organization not known locally for supporting the tenets of free markets and private property ownership, but this partnership is nevertheless welcome.
Small and medium-sized enterprises have borne the brunt of the negative impacts of the Covid-19 pandemic – mostly among those in the tourism and hospitality sector-- but singling out manufacturing and Green endeavours will be popular if it creates sustainable jobs.
The recent history of Government assistance to small businesses has not been without its critics, so it is profoundly hoped that this link with a major international private sector company will smooth whatever processes are involved.
We can be sure that our reputation as a country hangs on its success, not least among the international banking community in the United States.