With the global outbreak of the Covid-19 virus now crippling economic activity worldwide, South African SMMEs are particularly vulnerable. Local businesses have already been battling through a technical recession, severe load-shedding and low consumer and business confidence..
To find out what is most troubling SMMEs as South Africa scrambles to contain the spread of the Coronavirus, Cross Transactional Solutions one of Africa’s largest Fintech consortiums, conducted a detailed survey with clients and customers.
The survey aimed to pinpoint the impact of the coronavirus on local SMMEs, as well as to identify the particular pain points for businesses as the crisis unfolds.
“So far, the survey results have been startling in that they are revealing just how serious the economic impact is going to be for South Africa’s already overburdened SMMEs,” says Paul Kent, CEO of Cross Transactional Solutions. “Almost 70% of respondents have indicated that there will be a direct impact on their business.”
Already, economists and analysts are warning that prolonged disruptions to global supply chains will cause major production delays – or will in some instances halt production altogether.
South Africa, along with many other African countries, is overly reliant on China (the epicentre of Covid-19) for a large bulk of exports and imports – so the Chinese slowdown will have a dramatic, long term impact on many sectors and industries across the African continent. This means that SA SMMEs who source stock locally will arguably be in a far stronger position in the weeks and months ahead.
According to the Cross Transactional Solutions survey results thus far, over 50% of respondents buy and source stock locally, which is a positive indicator.
“Apart from the direct economic impact, business owners are concerned about the health of their staff and family as the global pandemic spreads,” adds Kent. “While most people are informed about what to do in the case of infection, the impact on day to day life will be significant.”
World Health Organisation (WHO) urges the use of contactless payments as cash is risky
As the global health crisis worsens, people should be limiting contact with others where possible, and also limiting contact with cash and goods that have changed hands frequently.
Notably, a spokesperson for the World Health Organization said contactless cards could ‘reduce the risk of transmission’. Indeed, cash notes change hands hundreds or even thousands of times during circulation … and can pick up dirt and bugs as they’re passed around. Some experts say that Covid-19 could latch onto currency in the same way that it is able to live on hard surfaces such as handrails and handles. The Bank of England has also acknowledged that banknotes “can carry bacteria or viruses” and urged people to regularly wash their hands.
“Switching to contactless payments – where possible – is a no-brainer for individuals and businesses as the world struggles to contain this pandemic,” says Kent. “We must harness all the tools available to us, and limit the spread of this virus by taking simple but critical measures in the way we live, work and transact.”
While the country prepares itself for quarantine, the best thing you can do now is to ensure that you support your local independent retailer - and ensure you tap to pay for all retail merchandise, where possible.