South Africa’s SMME payment hotline

21 September 2009

Small, medium and micro enterprises (SMMEs) experiencing late payments of more than 30 days after doing business with the government can now call a hotline on 0860 766 3729 or fax their details to 012 452 0458 for assistance.

Through the hotline, launched by Trade and Industry Minister Rob Davies in Pretoria this week, a group of agents will provide a single point of contact to facilitate the speedy payment for services or products provided to the government.

‘Contractual obligation’

Davies said a number of small businesses had in the past been forced to close down as a result of delays in payments, adding that the Public Finance Management Act called for contractual obligations on accounts to be settled within 30 days of receipt of invoice.

“It is our experience that small enterprises are still being paid extremely late, in some instances after 90 days, and this is adversely affecting the viability of small business,” he said.

There are about 2.4-million registered SMMEs in South Africa, accounting for 40% of the country’s gross domestic product (GDP).

Davies said that while the delays could be absorbed by larger companies with access to credit, late payments could have devastating consequences for small firms.

Payments overhaul

Davies said payment processes within the government needed a complete overhaul. “Some of the procedures and processes have remained a stumbling block, and it’s a major challenge that we need to address.

“Of course we need to ensure that the processes and procedures are such that they ensure proper control and efficient use of resources, but we must at the same time cut out the unnecessary stress and procedures that delay payments unnecessary,” he said.

The Small Enterprise Development Agency will be responsible for the day-to-day operation of the call centre. The agency will compile annual reports identifying the major reasons for late payments and identifyiing government departments prone to the problem.

About 760 government departments, agencies and municipalities have been asked to supply the call centre with the names of people responsible for payments. To date, 512 have responded.

Source: BuaNews