Only registered and tax-compliant small businesses can qualify for unrest Relief Fund, which automatically sidelines black-owned informal businesses in townships.
The government’s move to establish a Relief Fund for business that were affected by unrest in July is laudable. However, the problem is that its requirements sideline informal black-owned businesses in townships in Kwazulu-Natal and Gauteng, which also incurred financial losses. Only registered and tax-compliant small businesses can qualify for assistance.
Department of Trade, Industry and Competition pledged that it will avail R3.9 billion to provide financial support for rebuilding of businesses that lost assets (stock and property). The Department of Small Business Development’s recovery finance for businesses will combine a grant of 60% and a 40% loan.
The looters did not spare informal businesses in townships, even the ones who operate from makeshift stalls along streets. With no access to any form financial support, the owners, most of whom depend on businesses for subsistence will be left in depths of despair.
The unrest relief fund is not the only one that excludes informal businesses. Even the similar conditions also applied for businesses to qualify for Covid-19 financial support. Even the National Youth Development Agency’s Youth Enterprise Rebuilding fund only supports businesses that are registered and tax compliant.