The role of financial institutions in contributing to the regeneration of the small, medium and micro enterprises (SMMEs) sector will be of particular importance as the African continent is now in the rebuilding period after the Covid-19 crisis.
This is according to head of retail products at Absa Regional Operations (ARO) Fehmida Motara, who says the ability of governments, financial institutions, businesses large and small, entrepreneurs and civil society to find new and innovative methods to stimulate growth in the SMME sector will determine how successfully Africa emerges from the pandemic.
“As a result, agility, co-creation and partnerships are the new focus areas as we emerge from the depths of the Covid-19 pandemic,” said Motara.
She said every industry and sector across the continent has needed to relook and reimagine the way it operates following the devastating economic impact of the global health crisis.
According to World Bank figures, formal SMMEs make up 40 percent of gross domestic product in emerging economies, a number that climbs significantly when informal SMMEs are taken into account.
SMMEs are the bedrock of many economies in Africa and require support as they are an important indicator of any country’s economic health, playing an important role in job creation and sustaining livelihoods and local economies.
“As a bank, during the Covid-19 pandemic we provided meaningful assistance to smaller companies when it came to solutions such as payment holidays and debt restructuring.
“In doing so, we worked together with industry regulators to ensure that we provided support to economic sectors that desperately needed it. In some markets, banking institutions partnered with governments to disburse much-needed financial support to individual customers, SMMEs and the broader business sector to keep doors open, retain jobs and minimise the economic impact of the crisis,” Motara said.
The emphasis was very much on helping to support livelihoods and preserve those businesses and jobs they could while continuing to fight the pandemic through the provision of personal protective equipment and medical supplies wherever possible, she added.
