Close to 200 businesses liquidated in March - survey
The latest data from Statistics SA has revealed a staggering trend of liquidations during the Covid-19 pandemic and subsequent lockdown.
The liquidations and insolvencies report show that 216 companies were liquidated last month, while 178 others were liquated in February.
This is a jump of 21%.
The report, released on Monday, also revealed that the number of liquidations between March last year and the same month this year jumped by 49%.
Co-Founder of the non-profit organisation BeyondCOVID Lings Naidoo says the challenges small businesses face in the wake of the lockdown include inadequate access to affordable funding.
"We've seen a very worrying trend in the trends that we've run from July last year to now and while there is a slight uplift - overall small businesses in particular, one in four small businesses are closed and small businesses are 26 times more likely to be closed than their corporate counterparts.
"The main driver for this is Covid-19, it's impact in both demand either directly in terms of change in consumer behaviour or reduced ability to spend, as well as employee's ability to operate in a kind of business-as-usual market," Naidoo adds.
The hardest hit sectors include financing, insurance, real estate and accommodation.
But it's not all doom and gloom.
According to Naidoo, construction and agriculture fared better during the pandemic.
"Almost all business has been afflicted by Covid-19. Some businesses are surprisingly doing well.
"A lot of businesses trimmed back and looking to see how they can manage their cost, ensure they balance their books and are hoping that this difficult period will come to an end, sooner rather than later.”
Naidoo adds it's important to close address the gaps between the public and the private sector to create a more sustainable environment for business across the board.
"The good news is that government has a lot of programmes that they have but the challenge is that quite often across government, even taking the private sector into account, the support is quite disjointed.
"We really want to see the numbers of insolvencies and liquidations drop and see more small businesses reopen."
Listen to Lings Naidoo below:
