South Africa’s government finances are turning the tide, Finance Minister Enoch Godongwana said during the delivery of the budget speech on the 23th February 2022. On his budget speech Godongwane gave a glimpse of light at the end of a grim fiscal tunnel.
The Finance Minister, Godongwana, announced that a new bounce-back scheme will be launched. He mentioned that this new bounce-back scheme will consist of two parts, 1) A small business loan guarantees of R15 billion that will be provided through participating banks and development finance institutions, 2) Government will underwrite the first 20% of loan losses. The eligibility criterion, including the requirement for collateral, has been “loosened”. This mechanism will be launched next month, the Treasury announced.
And he further added that Treasury wants to introduce a business equity-linked loan guarantee support mechanism by April this year.
Some of the highlights in the 2022 budget:
- We intend to bring the total support package through the bounce-back scheme to R20 billion.
- The equity support mechanism of this scheme will be facilitated through DFIs. It will also be available to qualifying non-bank small and medium finance providers.
Enoch Godongwana closed on the SMEs by saying, details of the terms of the equity-linked guarantee mechanism will be provided soon.
To view and read the full speech see link below:
http://www.treasury.gov.za/documents/national%20budget/2022/speech/speech.pdf
Thato Motlhokodi
BrownSense Group – Community Manager