Solidarity Fund and NEF to provide R450m to businesses hit by looting
The Solidarity Fund and the National Empowerment Fund (NEF) have teamed up to offer R450m in financial assistance to businesses affected by the civil unrest that gripped KwaZulu-Natal and Gauteng earlier this year.
Wongakazi Majola, pillar lead for the Humanitarian Crisis Relief Fund within the Solidarity Fund, said the partnership was conceptualised after President Cyril Ramaphosa’s announcement in July that the government would provide R400m to the crisis relief fund.
“We received the R400m but we also received funding from other donors as well. This humanitarian crisis relief fund is only looking at unrest in KwaZulu-Natal and Gauteng, while the Solidarity Fund continues its work,” Majola said.
She said the humanitarian crisis relief fund decided to focus on business recovery, medical and food support.
The criteria for choosing businesses include those that have had a turnover of R3m or more a year, and are from the areas that were affected by the looting. They must also have been operating before the unrest.
“We [the NEF and Solidarity Fund] felt we can look at entities that have a turnover of R3m and above. Those can be vetted, monitored and evaluated by the NEF,” said Majola.
The Solidarity Fund will provide grant funding to be blended with NEF loans. NEF’s capital allocation will be R300m and the Solidarity Fund will provide a grant allocation of R150m to alleviate some of the cost of rebuilding.
“We said because NEF's mandate is to focus on black businesses, this initiative should look at all business that have been affected.
“We issued a call for proposals from businesses. The NEF has investment officers who go to the ground to assist businesses to fill out their applications.”
Majola said they anticipated assisting 60 businesses through the partnership. So far, 37 businesses have been selected for funding valued at R298m. “Out of that amount, R69m is coming from the grant funding side. The businesses will also receive non-financial support that NEF usually provides,” she said.
Twenty-four percent of the 37 businesses are from Gauteng and 76% from KZN. These are companies that have either closed down or are struggling to stay afloat due to the unrest.
On Monday, the NEF and Solidarity Fund were in Gauteng at Chris Hani Crossing in Vosloorus and Dobsonville Mall in Soweto. On Tuesday, they will go to malls in Phoenix, KZN.
“We are speaking to businesses that have been affected. We are doing the last lap of our needs analysis,” said Majola.
Businesses looking for funding should go to the NEF website and its social media platforms.
The NEF partnership will run until all the funds have been disbursed.
NEF spokesperson Moemise Motsepe said: “We are excited about this partnership because it offers us the possibility to make a difference for the benefit of the entrepreneurs whose businesses were vandalised in the civil unrest. These are small businesses that are not able to achieve their own recovery.”
He said the commitment between the two organisations was to also help businesses reopen their doors so they could continue to provide goods and services to communities and to safeguard jobs, and “largely to ensure they continue the daily work of contributing to the country’s GDP. There is a need for all to hold hands to save these businesses.
“Our core mandate is to identify eligible clients for various benefits. We receive, screen and process applications on the basis of the agreed criteria. We then disburse the funding.”
The NEF also provided mentorship support to increase the chances of the business succeeding, Motsepe added.