Leaked draft document shows that SMME Relief Finance was only meant for 51% black-owned businesses.
A leaked document from the department lists certain requirements that businesses must meet before they will be eligible for financial assistance from the government’s COVID-19 emergency fund. One of these is that a business must be black-owned 51% to qualify.
The Department of Small Business Development highlighted that it was a draft document from a week ago. “It was not meant to be shared with the public,” the department said on Twitter.
The Citizen falsely claimed that the document is “fake news” as the document was in a draft stage at the time of being leaked on Twitter.
It is not known if the department backtracked on the requirements after receiving a donation of R1 billion each from the Rupert and Oppenheimer families.
“We also want to clear the ‘news’ that we will support all small businesses regardless of the demographics of the owners. It is not true that we will only help 51% black-owned businesses.”
Singer Dewald Wasserfall reached out to his fans on Facebook expressing his disappointment in the government. In a statement addressing his fans Wasserfall says:
“This morning I hoped to see if my company could apply for the aid fund that will help ‘all small businesses’ during Covid-19, only to find out that businesses whose ownership is at least 51% black may apply. And now it feels as if my own country does not consider me a South African. Does the government think that only black people’s businesses will suffer during the lockdown? Can anyone please help me understand and justify this?”
In a statement, Khumbudzo Ntshavheni, Minister of Small Business Development said, “We also want to clear the ‘news’ that we will support all small businesses, regardless of the demographics of the owners. It is not true that we will only help 51% black-owned businesses.”
The Department of Small Business Development website set up to provide relief for small, to medium-sized and micro businesses went live on Tuesday morning and many applicants claimed to have run into the previously unpublicised requirement that in order to be granted state assistance a business would need to be majority black owned. HOWEVER, Some of the actual requirements required by the form to apply, include:
- Annual turnover;
- Shareholders (including current BEE standing);
- Number of employees;
- Employee demographics; and
Shortly after the Presidential Address, screenshots of a document started to circulate on social media which suggested that only black-owned businesses will qualify for financial assistance. The document stated that for an SMME to qualify for relief, it “must be 51% black-owned”. The Department of Small Business Development highlighted this was a draft document from a week ago and was still under revision. “It was not meant to be shared with the public,” the department said on Twitter. It is therefore not clear whether the same qualifying criteria will hold in the final version of the SMME relief funding document.
The government’s SMME website where small and medium-sized businesses can apply for funding also clearly asks for the gender and race of their shareholders. It also asks applicants about the gender and race breakdown of their employees, which are typically associated with BEE requirements.
When Johann Rupert was asked about the alleged “black-owned-only” assistance his response was clear – “Our assistance will be available to ALL South African businesses”.
It must be noted that Rupert’s donation is part of the Solidarity fund, which is separate from the government’s SMME relief fund. To qualify for access to the SMME fund, businesses will be required to register on the SMME South Africa platform here. Source: Our money will be available to all South African businesses – Johann Rupert
The department of small business development’s spokesperson, Sarah Mokwebo, confirmed to The Citizen on Tuesday morning that this was fake information. Source: Confirmed: Guideline that government will only help ‘51%-black-owned companies’ is fake
Numerous people have been tweeting their outrage about the false fact, and civil rights organisation AfriForum even launched a campaign against what its CEO, Kallie Kriel, called a “racist policy”. They claimed to have seen a document from the department listing requirements that businesses needed to meet before they would be eligible for financial assistance from government’s Covid-19 emergency fund, including that they should be 51% black owned. It was announced days ago that government would be assisting small businesses impacted by the coronavirus via a debt relief fund following President Cyril Ramaphosa declaring a state of national disaster in response to the Covid-19 global pandemic.
On Monday night, Ramaphosa announced more stringent measures, including a 21-day lockdown that would effectively make it more difficult or even impossible for the majority of businesses in the country to operate. Only people deemed essential would be allowed to move more freely.
“The Debt Relief Fund is aimed at providing relief on existing debts and repayments, to assist SMMEs during the period of the Covid-19 State of Disaster,”
“This facility will assist entities to acquire raw material, pay labour and other operational costs. All these interventions will be structured to match the patterns of the SMMEs’ cash flows, as well as the extent of the impact suffered,” said The Department of Small Business Development. For small businesses to be eligible for assistance under the Debt Relief Fund they would have to demonstrate a direct link to the impact or potential impact of Covid-19 on their business operations.
The website has been experiencing some demand issues on Tuesday but can be accessed here: http://www.smmesa.gov.za/
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