South Africa has doubled to six months the term of loans to small and medium-sized businesses to help them survive the COVID-19 recession and made other changes to make the credit easier to access, the treasury said on Sunday.
President Cyril Ramaphosa announced the 200 billion rand ($12.00 billion) loan scheme in April to help businesses, as part of stimulus measures to lessen the pandemic impact on South Africa’s already shrinking economy.
The loans are intended to meet urgent requirements, such as salaries, rents and contractual obligations.
Many of South Africa’s small and medium-sized firms were thrown into disarray when the government introduced a lockdown at the end of March to try to contain the spread of the novel coronavirus that causes COVID-19.
They lost much of their revenue but still faced fixed costs, and many have struggled to recover even as the lockdown lifted.
Sunday’s changes to the scheme include making “bank credit assessments and loan approvals more discretionary and less restrictive,” the treasury said in a statement.
They extend the draw-down period and the interest and capital repayment holiday to six from three months and replace the 300 million rand turnover cap with a maximum loan amount of 100 million rand.