Standard Bank Welcomes “Business Friendly” Aspects of 2022 Budget Speech

By: Simone Cooper – Head of Business Banking at Standard Bank Group

Businesses, and especially small businesses in South Africa, have been particularly hard hit by a dual crisis starting with slower economic growth and then the severe impact of COVID-19 restrictions in 2020 and 2021. There is broad acknowledgment that the untapped potential in South Africa’s economy is small and medium sized businesses, it’s where our future growth and employment will be coming from.

Standard Bank has assisted impacted small businesses with COVID-19 related support and funding. In the early stages of the pandemic, the bank’s focus was on helping businesses stay in business and meet their obligations. Through a partnership with the South African Future Trust (SAFT), established by Oppenheimer Generations, Standard Bank enabled 3500 SMMEs with R250 million in interest-free loans to continue paying salaries to more than 22 000 employees. In collaboration with the South African Government, businesses were supported with much needed and affordable funding through the COVID-19 Term Loan Scheme to cover operational expenses. The bank has implemented a range of support measures during the pandemic from providing access to flexible funding for cashflow support, to fee waivers, loan repayment moratoriums and creating awareness around support information resources and solutions to help businesses navigate through this period.

As businesses start to rebuild and recover, Standard Bank’s focus has shifted on building lasting ways to meet the needs of small enterprises, so that businesses can stay in business and grow. It is now easier for SMEs to do their banking with Standard Bank as the bank has moved from physical towards virtual branches. Standard Bank’s Enterprise Direct virtual relationship model gives SMEs direct access to a team of experienced Business Bankers and specialists that can provide banking services through email and telephony channels. This is supplemented by 24/7 digital offerings to apply for loans, do online banking, and access free information, tips and tools through BizConnect. Standard Bank ensures that business owners have a one-stop for anything needed to start, manage and grow their business.

Simone Cooper, Head of Business Clients at Standard Bank, says: “We welcome the further support for small businesses as announced in this year’s Budget Speech, which will go a long way to revitalizing this critical sector of the South African economy. The reduction in corporate income tax from 28% to 27% is welcome news and will hopefully encourage businesses to invest and grow the economy and address the country’s stubbornly high unemployment rates, particularly among the country’s youth cohort.”

In an effort to further combat the youth unemployment crisis, Finance Minister Enoch Godongwana announced an increase in the employment tax incentive for companies employing young people, which has been doubled to R1,500 a month. “In essence, this special compensation will encourage businesses to employ more youth in their businesses,” says Cooper. The employment tax incentive programme was introduced in 2014 as a form of tax relief for firms hiring workers between the ages of 16 and 29, who earn less than R6 000 per month.

“Standard Bank welcomes the focus on creating job opportunities for young people, considering that the country is grappling with an extremely high youth unemployment rate that is hindering social and economic development. We recognise that this is a crisis that requires urgent intervention and as such, we have developed a series of initiatives to complement government’s efforts in tackling youth unemployment and hold the belief that the state and private sector can work together to break jobs deadlock,” Cooper concludes.

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