COVID-19 and small business finance: Lessons from the 2008 global financial crisis

The small and medium enterprise (SME) sector is critical for the South African economy and job creation – but it is highly vulnerable to external shocks. In responding to the COVID-19 crisis there is much to learn from the experience of the 2008 global financial crisis (GFC) and the impact that the credit contraction after the GFC had on the South African economy and the SME sector. This policy brief looks at the effect of the GFC, particularly the extent of credit contraction and its impact on small businesses and job creation; and makes some recommendations on how to avoid a repeat of the same the cycle.