Entrepreneurs Capabilities EveryONE EmployONE Initiative Tackles Unemployment in South Africa! Philanthropy Economy Tshwane Small Business Development Minister Khumbudzo Ntshavheni said the turnaround time for applications and approval will be seven days at worst, while approval and disbursement of funds is expected to take five days.
Photo Credit: Pexels | Stephanie Lessante | Les Finances

The “Pay in 30 Days” initiative has the power to save many small and medium-sized businesses in South Africa!

 

Johannesburg, South Africa (01 December 2020) – South African businesses have signed a public agreement to pay small and medium enterprise (SME) suppliers within 30 days!

In an effort to ensure SMEs in South Africa survive the economic crisis, exacerbated by the COVID-19 pandemic, more than 50 large companies have formally committed to paying their SME suppliers in 30 days.

The initiative, called “Pay In 30”, is spearheaded by Business for South Africa (B4SA), the SA SME Fund, and Business Leadership South Africa (BLSA), and supported by, amongst others, Business Unity South Africa (BUSA), the Small Business Institute (SBI) and the Black Business Council (BBC).

"Pay in 30 Days" - South African Corporates Make a Promise to Pay Small Businesses Within 30 days!
Photo Cred: Business for South Africa

The recession and pandemic have had a devastating impact on approximately 2.5 million SMMEs accounting for 10.8 million jobs. Transunion data points to 6.4% of formal SMEs going into bankruptcy (up 50% from last year), with 260 000 jobs lost and another 240 000 at risk. With a tightening economy, the benefits of the banks’ payment holidays coming to an end, and the winding down of the Temporary Employer/Employee Relief Scheme (TERS), this is expected to rise to 10-15% of small businesses going into business failure next year, with almost a million jobs lost and at risk.

“Paying our SME suppliers early is a clear demonstration of a shared value approach to business. As a society, we need to start implementing bold actions to grow our economy and preserve and create jobs. I believe entrepreneurs are a powerful force and an integral part of this rebuilding. We need to support them. Hence I’m calling on my fellow CEOs to join us in this significant initiative,” says Adrian Gore, CEO of Discovery Group and Chairperson of the SA SME Fund.

Even before the crisis, one of the key pressure points for SMEs was access to working capital and cash flow: Xero Accounting’s survey in December 2019 found that 91% of SMEs are owed money outside of their payment terms, and 47% cite cash flow issues and late payments as two of the main obstacles to their growth. This has a domino effect: more than 20% struggled to pay their staff and suppliers and were denied access to finance because of poor cash flow.

COVID-19 has made this problem worse. Some companies have used the crisis to extend payment terms and have asked SME suppliers to reduce fees. This is simply not sustainable for smaller businesses. Corporate South Africa recognises that paying their SME suppliers in 30 days is one of the key levers for an SME’s sustainability.

“Pay In 30 is aimed at institutionalising a culture of early payments of SMEs. Over 50 companies have committed to this campaign, and we expect this number to increase in the months to come,” says BLSA CEO Busi Mavuso, who is also a member of the B4SA steering committee.

“I am proud that our members recognise that we’re all in this together, and as corporate leaders, we need to do our part to help our economy grow,” she adds.

South African business owners are excited about the initiative and are hoping this will change historical payment challenges they have faced.

“This initiative is incredible!!! As a small business owner, we have suffered for years at the hands of big corporates – and funny enough two of the brands that have signed up, kept us waiting for payment for over 8 months! Hopefully, they are not just joining for publicity and will stick to their new promise.” – South African Business owner who wishes to stay anonymous.


Sources: Business for South Africa
Don’t ever miss the Good Things. Download the Good Things Guy App now on Apple or Google
Have something to add to this story? Please share it in the comments or follow GoodThingsGuy on Facebook & Twitter to keep up to date with good news as it happens or share your good news with us by clicking here
Click the link below to listen to the Good Things Guy Podcast, with Brent Lindeque – South Africa’s very own Good Things Guy. He’s on a mission to change what the world pays attention to, and he truly believes that there’s good news all around us. In the Good Things Guy podcast, you’ll meet these everyday heroes & hear their incredible stories:
Or watch an episode of Good Things TV below, a show created to offer South Africans balance in a world with what feels like constant bad news. We’re here to remind you that there are still so many good things happening in South Africa & we’ll hopefully leave you feeling a little more proudly South African. 

About the Author

Brent Lindeque is the founder and editor in charge at Good Things Guy.

Recognised as one of the Mail and Guardian’s Top 200 Young South African’s as well as a Primedia LeadSA Hero, Brent is a change maker, thought leader, radio host, foodie, vlogger, writer and all round good guy.

Leave a Reply

Your email address will not be published. Required fields are marked *