05 May 2020

LEA businesses suspend operations due to COVID-19 pandemic

The advent of the COVID-19 has disrupted Local Enterprise Authority (LEA) registered SMMEs across the country.

A press release from LEA says in a survey covering 382 enterprises, 63 per cent of LEA businesses have suspended operations due to COVID-19 pandemic, with an average reduction in monthly revenue of 47 per cent.

The release states that the 382 enterprises have 2 669 employees, with a total wage bill of P5.9 million.

It also states that the tourism sector that accounts for 27 per cent of the jobs bore the brunt of the impact, with a 72 per cent revenue loss in March, which has put 729 jobs at risk.

It also says of the 142 enterprises remaining operational, challenges in importing raw materials and reduced revenue due to COVID-19 related restrictions jeopardised their viability.

Further, it says LEA has extended support to SMMEs, especially those that supply essential services to produce permits for their staff, as well as facilitating imports of raw materials for the production of hand sanitisers and medical gowns.

Nevertheless, it says businesses were also assisted to collaborate so as to optimise resources.

Further, the release says of the 382 SMMEs surveyed, 209 had loans, with a total loan balance of over P130 million and that 300 SMMEs have been assisted with applications to BURS for wage subsidy, which helped avert job losses, especially in the tourism sector, which accounts for 61 per cent of the loan balance.

It also says 19 businesses were further assisted to apply for working capital and loan repayment holidays at CEDA and commercial banks. Ends