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Case study: Support for micro and informal businesses to recover from the Covid-19 pandemic and grow in the long-term

The ~3 million micro and informal businesses provide opportunities to a huge proportion of South Africa’s workforce. But during lockdown, most were stranded without any income or safety net, struggling to cover their living expenses. Their situation was worsened by a gap of funding and support for the smallest and most vulnerable players in our economy. 

An international development organisation asked TRi Facts for support to conduct a rapid assessment of the impact of the Covid-19 pandemic on these businesses through a literature review, conversations with experts, a country-wide survey with ~4000 business owners in all provinces as well as virtual focus groups.

The study highlighted the struggles of vendors at taxi ranks and train stations, who lost most customers, hair stylists who had no income for three months or owners or tourism businesses and restaurants that were subsidising their businesses as long as bans on international travel and events continued. But it also provided insights how entrepreneurs successfully adjusted to the “pandemy-economy”, e.g. by communicating with customers via WhatsApp and delivering products to their homes or manufacturing essential items, such as masks.

Based on the analysis, a list of mechanisms and tools provides guidance on how to support the sector with the following interventions considered as most impactful and affordable.

Short-term mechanism and tools

  • Distribute personal protective equipment 
  • Assist with funds so businesses can replace assets or stock
  • Review existing policies include a waiver on utilities and fees for the informal sector during lockdown

Long-term mechanisms and tools 

  • Create an enabling environment facilitated by suitable laws and regulations
  • Use digital platforms to facilitate e-commerce or structure supply chains and facilitate bulk buying
  • Support the capacity building to facilitate access to market and procurement. 

Throughout the whole process, we worked hand in hand with our clients to ensure that they are well equipped to implement these recommended interventions to ensure that micro and informal businesses receive the help they need to recover from the Covid-19 pandemic and grow in the long-term.

You can access the full report here:

https://www.za.undp.org/content/south_africa/en/home/library/the-impact-of-covid---19-on-micro-and-informal-businesses-in-sou/

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