COVID-19: What the stats say about the impact on SA’s SMMEs

Small businesses worldwide continue to grapple with the economic fallout of the COVID-19 pandemic, with many at risk of closure. In South Africa, the latest data from fintech group Yoco reveals a staggering 84% plunge in small business revenues as the virus brought economic activity to a standstill. Bradley Wattrus, Co-Founder and CFO of Yoco, joined CNBC Africa to shed light on the current state of SMMEs in the country. The small business recovery monitor developed by Yoco tracks sales volumes and performance of small businesses compared to the baseline period before the crisis. Wattrus highlighted that around two weeks into the lockdown, small business revenues had plummeted to as low as 8% of previous levels, marking a 92% reduction in volumes. While there has been a gradual recovery in recent weeks, sales still remain significantly below pre-crisis levels, ranging from 25 to 40% across different industries and provinces. Despite the slight improvement, SMMEs continue to face a substantial drop of 60 to 75% in revenues as they navigate new ways to engage customers and adapt their business models to the current environment. Yoco's client base, which consists of approximately 80,000 small businesses, is predominantly concentrated in the hospitality, health, beauty, fitness, and retail sectors. The hospitality and personal service businesses have been hit hardest due to the nature of their operations requiring face-to-face interactions, while retail has shown more resilience by implementing delivery and pickup options to serve customers safely. Wattrus emphasized the importance of digital innovation in supporting small businesses during these challenging times. Yoco has introduced three online payment products to facilitate transactions and help businesses survive the crisis, such as payment pages, payment requests, and voucher services. These alternative payment methods aim to assist merchants in digitizing their operations and adapting to the accelerated shift towards digital payments. Looking ahead, Wattrus underscored the need for continued product development to better cater to the evolving needs of small businesses in the digital economy. As South Africa awaits President Cyril Ramaphosa's address on the future of lockdown measures, Wattrus expressed the importance of a risk-based approach to reviving the economy. He noted the varying impact of the pandemic on businesses in different regions, with urban areas experiencing more significant challenges compared to rural areas. Wattrus called for transparency in decision-making and urged support for SMEs, highlighting their vital role in driving economic recovery. As small businesses continue to weather the storm of COVID-19, innovative solutions and collaborative efforts are crucial to ensuring their survival and resilience in a rapidly changing business landscape.