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Covid-19: More DTIC notifications
Pretoria, Gauteng, SA – Dr Jaywant Irkhede, Director: Leather & Footwear at the Department of Trade, Industry & Competition (DTIC), last week forwarded this announcement. Dr Irkhede's contact details are +27 (0)66 301 2044, firstname.lastname@example.org.
COVID-19 GUARANTEED LOAN SCHEME FOR SMALL AND MEDIUM ENTERPRISES
As announced by the President, National Treasury, the South African Reserve Bank and commercial banks have jointly created a guaranteed loan scheme. The purpose of this scheme is to help small and medium-sized businesses and the economy. In terms of this scheme, R200 billion will be ultimately made available for new loans to existing customers. The initial phase will be R100 billion.
The key features of the Covid-19 loan guarantee scheme are:
1. Covid-19 loans will be available from banks to eligible businesses in good standing with their commercial banks with an annual turnover of less than R300 million.
2. Funds borrowed through this scheme can be used for operational expenses such as salaries, rent and lease agreements, contracts with suppliers, etc. Loans will cover up to three months of operational costs and will be drawn down monthly.
3. Banks are not obliged to extend Covid-19 loans, and those that do will use their normal risk evaluation and credit-application processes. A business’ owners may be required to sign surety for the loan.
4. Each business may accept only one Covid-19 loan.
5. Covid-19 loans will be offered at a single, agreed lending rate by all banks participating in the scheme. The rate will track the repo rate.
6. A six-month repayment holiday will commence from the first drawdown, although interest will accumulate from the date on which the first drawdown on the loan occurs.
7. Repayment of interest and capital starts after six months and businesses have a maximum of 60 months to do so. Borrowers can repay the loan ahead of schedule.
8. The scheme will be rolled out by banks over the next few weeks.
The scheme works on the principle that profits and losses are ultimately shared between government and the banks. The scheme will receive all ‘profits’ on the loans, i.e. the difference between the rate at which banks lend the money (together with limited costs). This will include a guarantee fee charged to the banks in relation to the scheme. These profits will be used to offset any losses that the scheme makes. If the scheme suffers any further losses, these will be absorbed by the banks themselves, capped at 6 per cent of the size of the loan. Any further losses will ultimately be covered by the fiscus.
Please contact your bank for further details and eligibility criteria.
Restarting retail - 11/5/2020
Restarting manufacturing and retail: Details expected this week
Cape Town, W Cape, SA – Following the announcement that the manufacture and retail of 'winter clothing' will be allowed from May 1, a Government Gazette spelling out the conditions is expected to be published this week.
"We're busy writing a lot of motivations and product lists which have to be with the government by midday tomorrow [today]," National Clothing Retail Federation of SA executive director Michael Lawrence said yesterday. "The lists include footwear. We've been very specific about the categories."
He said the NCRF had also asked for time ahead of the scheduled re-opening to be able to "tidy up our stores", and to train staff and install any equipment required to comply with regulations.
"I suspect the government has already written the notification, and is just waiting to finalise details. They've set the date. They must make it happen, somehow."
He said retailers were welcome to contact him. (+27 (0)82 496 0126, email@example.com)
On the manufacturing side, Dr Jaywant Irkhede, Director: Leather & Footwear at the Department of Trade, Industry & Competition (DTIC), asked all manufacturers' associations in the leather industry to submit proposals to the DTIC: "We will appreciate if all six sub-sector associations (SAFLIA, SHALC, SAOBC, SACIA, SATTA and GGBB&LEA) can submit their proposal in favour of how the industry in their sub-sector would like to operate during Alert Level 4 by 27th April 2020. We would like to urgently feed all proposals to the DTIC Chief Economist by close of 27th April 2020. We have already received an official draft proposal today from Ernest Heunis of SHALC on behalf of Skins & Hides sub-sector for all tanneries to be allowed to operate under Alert Level 4 and it be gazetted under new regulation."
One manufacturer said of the recommended preventative measures and procedures for manufacturers produced by FLIC and published in last week's newsletter: "If you look at the list of things your staff and factory have to now comply with, I feel first of all they will battle to work productively and secondly with the expense will it be worth opening?" [Note: FLIC's list was of recommendations, not regulations]
Said SAFLIA director Jirka Vymetal: "The little I do know is that working conditions will be very strict under COVID conditions, so most of what FLIC state will probably be a requirement. So yes, going forward there will be huge additional expenses for a factory to commence and carry on working."
So far, leather goods haven't been mentioned in the re-opening dialogue. Said Equator - the Belt Factory™ director Leon Buhr: "Winter shoes might manage to get into that definition [winter clothing], but I doubt belts or bags can make a case to be included as winter clothing at Level 4. Although you do need a belt to hold up your corduroys.... I have lowered my expectations to zero so whatever happens I can only be surprised on the upside. We fully support the extensive safety protocols in work-places and factories and had already implemented many of these soon after 4 March, and are readying for a very stringent environment at the workplace as thinking and suggestions around this evolve. At the end of the day, whether we can re-open now or later, everything depends on consumer demand. Nothing else matters really, does it?"