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Door opens for COVID-relief to informal sector

Coming on board: The informal sector has been invited to go mainstream
The Local Enterprise Authority (LEA) has embarked on a national initiative to register informal and formal SMMEs operating locally with the objective of developing a centralised database.

The database will be instrumental in the decision-making around how the COVID-19 financial interventions from government and other organisations can be properly channelled.

Investment, Trade and Industry minister, Peggy Serame has previously unveiled measures targeted at the SMME sector, including direct financial assistance and interventions under the LEA and the Citizen Entrepreneurial Development Agency.

While government has committed to ensuring informal sector players are covered through the food-relief programmes, the ongoing registration exercise is designed to provide assistance to their businesses and draw them closer to mainstream economic activities. 

LEA corporate and stakeholder communications director, Boikhutso Kgomanyane said informal sector businesses are required to have registered by May 31, 2020.

“The main objective of the registration exercise is to develop a centralised database of all trading SMME businesses countrywide, which will inform the development of targeted support programmes and policies that will effectively benefit the SMME sector,” she said in a statement.

In future, according to LEA, SMME business development support by government will only be availed to those registered on the SMME database.

The authority says registration is useful in helping government

plan interventions for the informal sector and SMMEs. Those wishing to register do not have to be registered for tax or registered elsewhere. In addition, people employed full time but running informal businesses can also apply to register.

Registration can be done online on the LEA website or by dialling *165# on the various mobile networks available locally.

A recent snap survey by LEA found that the COVID-19 pandemic has adversely affected most of the small businesses assisted by the authority. According to a survey of 382 companies, 63% had suspended operations. The sample companies also reported average drops in monthly revenue of 47%.

The SMMEs still operating were struggling with importation of raw materials and the inability to pay fixed costs such as rent, salaries, loans to mention a few.

Generally, local SMMEs struggle to access markets for their products owing to a number of factors such as low output and quality, customer preference for imports, lack of capacity and consistency in production as well as absence of deliberate policy instruments or mechanisms to protect local supplies.






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