DA urges speedy resolution of small business funding teething problems

The Democratic Alliance (DA) has noted with concern the teething problems that accompanied the initiation of the Small Business Development Department’s Covid-19 relief response yesterday, centred on problems with the SMME registration website and mixed messaging about implementation.

We will therefore urgently request the Minister of Small Business Development, Khumbudzo Ntshavheni, to intervene to ensure that her department mitigate any further adverse impact of the current pandemic on small businesses.

We received several complaints from small business owners regarding the following:

  • Error messages from the website and the helpline call centre not being operational, with multiple call attempts not being picked up. While the Department had indicated that they have an IT team working on the website’s glitches, they must ensure that such glitches are not an ongoing problem.
  • Complaints about the limited range of sub-sector fields for SMME registration. Although the registration website was marketed as being for SMMEs seeking to apply for assistance from any of the funds/facilities on offer, the site in fact seems to be designed only for the purposes of the Business Growth and Resilience Facility, which is “targeted at SMMEs who locally manufacture or supply hygiene and medical products that are in demand in order to curb and manage the spread of the Covid-19 virus”. This has left many small business owners outside that scope wanting to register at a dead end.
  • The website is not secure and should be encrypted by activating an SSL certificate (which should be a basic feature for any website), in light of the sensitive information being requested.

In addition to the above, there was a flurry of confusion concerning the application of demographic criteria to the selection of beneficiaries. After her office confirmed that 51% black ownership would not be a requirement, Minister Ntshavheni said during the ministerial briefing that she wants to make sure there is “demographic spread that is representative”. If in practice, this means that the ANC seeks to achieve ‘demographic representivity’, i.e. through racial quotas, it will be hugely problematic as the issue at hand is to protect jobs, regardless of black or white ownership.

The DA believes that to provide clarity and peace of mind on this matter, the race of the business owner should be removed as a question on the online registration form and the website redesigned to resolve the aforementioned shortcomings.

Minister Ntshavheni also indicated that the Department would be aiming to achieve a 14-day turnaround timeframe for SMME assistance. While we appreciate the difficulties in setting up these systems and processes over a short period of time, unfortunately, that timeframe is far too long for the thousands of small businesses who have employees to pay and will need relief quickly, especially given the even slower payout processes of the UIF that are anticipated.

Finally, in acknowledgement of the “whole of society” approach required to weather the current storm, the DA will propose to the Minister that the Department undertake a “Buy Small Business, Buy Local” promotional campaign encouraging South Africans to support small businesses and help them keep afloat in the short term and to aid economic recovery once the worst is over.

As households stock up on groceries ahead of the nationwide 21-day lockdown, we especially encourage consumers to support street vendors when shopping for groceries as those traders will be hardest hit.