Phaphama SEDI, a non-profit organisation based in Cape Town recently released a Covid 19 support document to find solutions in aid of Township Business. With acknowledgement to government and its swift response to the pandemic,\u00a0a large gap has still not been covered, leaving thriving businesses in townships in a precarious position.<\/p>\n
The short research document is based off interviews with around 250 entrepreneurs from developing communities in South Africa. The document identifies 4 key gaps and makes 5 recommendations for how to improve support for small businesses during this time. Here are some of the findings:<\/p>\n
GAP 1: ELIGIBILITY – Most funding platforms require businesses to be registered, tax compliant and UIF compliant, with further requirements being 6 months of bank statements and financial projections.<\/p>\n
GAP 2: ASYMMETRIC AND MISLEADING INFORMATION – There is a gap in funding information. Entrepreneurs do not know where to find assistance. Funding requirements are often ambiguous. Business owners think that many funding options are grants, when they are actually loans – which can be misleading.<\/p>\n
GAP 3: EXCLUSION OF FOREIGN OWNED BUSINESS – There is no funding available for foreign-owned small businesses that employ South Africans.<\/p>\n
GAP 4: TIME LAG –\u00a0The waiting period between the funding application and the disbursement is too long for businesses in distress.<\/p>\n
Find the complete document here:<\/p>\n