Home South African All pain and no gain for SMEs after easing of restrictions

All pain and no gain for SMEs after easing of restrictions

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According to the Small Business Recovery Monitor index, the easing of lockdown restrictions has had little impact on SMEs

Small and medium enterprises (SMEs) have been hit the hardest by the Covid-19 pandemic. Picture: African News Agency (ANA) Archives

THE SO-CALLED “advanced Level 3” easing of lockdown restrictions have had little impact on the turnovers of small and medium-sized businesses (SME), according to the Yoco Small Business Recovery Monitor.

The Yoco Small Business Recovery Monitor index level stayed static at 55 percent in the week to June 24, when compared with pre-Covid-19 levels. 

There was also little movement in weekly SME turnover in the week to June 10, with the index remaining at 56 percent, which in turn, was also at the same as the week prior to that.

SMEs faced severe financial difficulties through levels 5 and 4 of the lockdown as they had to continue paying rent, salaries and other operational expenses while being forced to close. 

Some SMEs were allowed to trade after Level 3, and many more were allowed to trade following the recently “advanced Level 3” easing of restrictions. 

Consumer disposable incomes have also been severely affected by job losses and salary reductions.

Yoco, the distributor of point-of-sale devices to more than 80 000 merchants who operate mainly SMEs, said its Small Business Recovery Monitor index, as far as is known, is the only live, publicly available, SME transaction data resource.

The index can be used by entrepreneurs to benchmark performance. 

The index tracks the recovery of small businesses in South Africa through the lockdown and thereafter.

Yoco said that the lack of significant movement in the week to June 24 was due to continued very poor weekend trading in particular, with weekend SME turnover fluctuating between just 20 percent and 30 percent of the pre-Covid levels.

This had pulled the overall index down. The drop-off in trading over weekends had been a recurrent theme through May, as well.

“Weekdays have seen some good increases of late, particularly for the health care/beauty and fitness industries, which have seen large spikes since the move to advanced Level 3, particularly over the last 4 days,” concluded Yoco head of brand and communications Matt Brownell.

– Business Report