Treasury's bounce-back loan-guarantee scheme aimed at helping small businesses finance renewable energy comes into effec
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GUEST - Vukile Davidson, National Treasury Chief Director Financial Markets and Stability
The Bounce Bank Support Scheme for businesses signalled in the Minister of Finance’s February 2022 Budget Speech has come into effect. The purpose of the Bounce Back Support Scheme is to provide additional funding to qualifying businesses in order to grow the South African economy and to facilitate job creation. The Scheme is expected to facilitate the recovery and bounce back of businesses beyond the Covid-19 pandemic lockdowns. The Scheme will also help those businesses recovering from the July 2021 civil unrest in KwaZulu-Natal and Gauteng, as well as the current on-going flood related disaster.
In June 2020 the Covid-19 Loan Guarantee Scheme was established to help ease financial pressures experienced by qualifying businesses negatively affected by low economic activity following lockdown restrictions to reduce the spread of Covid-19. The Guarantee Scheme formed part of a package of regulatory and direct support measures which provided significant financial support and helped preserve many jobs and kept businesses afloat. The Bounce Back Support Scheme benefits from lessons learnt from the 2020 Loan Guarantee Scheme to provide for greater take-up including by Development Finance Institutions (DFIs) and non-bank Small and Medium Enterprise (SME) finance providers.
The Bounce Back Support Scheme comprises a loan guarantee mechanism of R15 billion and a smaller equity linked scheme which will be facilitated by National Treasury and DFIs. The smaller equity linked scheme will be introduced later in the year as a complementary tool of R5 billion.
The Bounce Bank Support Scheme for businesses signalled in the Minister of Finance’s February 2022 Budget Speech has come into effect. The purpose of the Bounce Back Support Scheme is to provide additional funding to qualifying businesses in order to grow the South African economy and to facilitate job creation. The Scheme is expected to facilitate the recovery and bounce back of businesses beyond the Covid-19 pandemic lockdowns. The Scheme will also help those businesses recovering from the July 2021 civil unrest in KwaZulu-Natal and Gauteng, as well as the current on-going flood related disaster.
In June 2020 the Covid-19 Loan Guarantee Scheme was established to help ease financial pressures experienced by qualifying businesses negatively affected by low economic activity following lockdown restrictions to reduce the spread of Covid-19. The Guarantee Scheme formed part of a package of regulatory and direct support measures which provided significant financial support and helped preserve many jobs and kept businesses afloat. The Bounce Back Support Scheme benefits from lessons learnt from the 2020 Loan Guarantee Scheme to provide for greater take-up including by Development Finance Institutions (DFIs) and non-bank Small and Medium Enterprise (SME) finance providers.
The Bounce Back Support Scheme comprises a loan guarantee mechanism of R15 billion and a smaller equity linked scheme which will be facilitated by National Treasury and DFIs. The smaller equity linked scheme will be introduced later in the year as a complementary tool of R5 billion.
