TUESDAY, 26 APRIL 2021: Brand-new data by Statistics South Africa
The Statistics of Liquidations and Insolvencies report shows 216 companies liquidated in March this year, compared to 178 the month before – a 21% jump, almost 50% higher than in March 2020. Business consultants are concerned about smaller businesses, which bear the brunt of the hardship. The number of liquidations between March 2020 and the same month this year jumped by 49%. Compared to the second month of this year, this figure is 21% higher.
The total number of liquidations increased by 18,9% in the first quarter of 2021 compared to the first quarter of 2020, according to Stats SA. Of all sectors, financing, insurance, real estate, business services (77 liquidations), trade, catering, and accommodation (47), and manufacturing (10) are the hardest hit.
Business consultants say the hardship is a direct result of the past year and affects smaller companies the most. “It is not that more companies suddenly found themselves in trouble. Many of the businesses that have folded in March this year, in all likelihood mostly smaller and medium-sized businesses, have struggled for many months before having to close, if not longer,” says Lings Naidoo, co-founder of BeyondCOVID.
Launched last year during the hard lockdown, the BeyondCOVID Business Survey, conducted by specialist management consultancy Redflank, aims to evaluate the impact of the pandemic on SMMEs in particular. “Our research has shown that smaller, micro, and medium-sized businesses, in general, are 26 times more likely to close their doors in times of economic upheaval than their corporate counterparts.”
As such, 26% of SMMEs that participated in the survey had to close during the lockdown, temporarily or permanently, the BeyondCOVID Business Survey shows. In addition, 54% of respondents said they were working below their usual capacity, and a third expressed they needed funding to continue to trade.
BeyondCOVID, as a registered non-profit company, is determined to help businesses cope with whatever is coming their way this year and beyond, over and above, providing them with trends, forecasts, and information they can use to develop survival strategies. The initiative is, for instance, creating an enabling and supportive framework to help SMMEs scale, grow, and mitigate obstacles. “We want to be part of the solution by making SMMEs more resilient and less vulnerable to economic shocks, whether it is a pandemic or a global financial crisis,” says Naidoo.
“We plan to do this by using our networks within the private and public sector to leverage funding and investments whilst providing access to resources, services, and technology to make them more robust, sustainable, and bankable.”
Naidoo explains that, so far, BeyondCOVID has engaged with Chambers of Commerce and various other players whilst organising smaller ventures into risk-sharing structures. “These are known as SMME Collectives and are supported by BeyondCOVID’s networks, services, and technological innovations.”
“It is true what they say: safety in numbers, also for businesses,” he adds. “Being part of a bigger organisation that has the means individual smaller companies lack, creates more stability. This is exactly what businesses and South Africa need in uncertain times. COVID-19 will be here to stay for a while. We need to work with, not fight, this reality.”
To find out more about BeyondCOVID, visit https://www.beyondcovid.co.za/
ABOUT BEYONDCOVID
BeyondCOVID is a registered non-profit company working to develop and enable a supportive framework for creating SMME opportunities for scale and employment.
BeyondCOVID assists businesses with services and technology, making them more robust, sustainable, and bankable, ultimately helping them survive the impact of the Covid-19 pandemic.
ISSUED ON BEHALF OF:
BeyondCOVID
ISSUED BY:
Gail Sham
Scoop Communications (PTY) LTD
Mobile: 083 854 2185
Email: gail@scoopcommunications.co.za
Published on Thursday, 13th May 2021 - 13:20
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