Willowton and Al Baraka launch new relief fund for SMEs
Applicants for interest-free loands from the R100m fund, which figure is likely to grow, must be Sharia-compliant
In another initiative aimed at helping small and medium enterprises (SMEs) survive the economic effects of the Covid-19 lockdown, the Willowton Group, with Al Baraka Bank, has announced the launch of a R100m fund to provide relief to ailing small businesses.
The launch comes at a time when small businesses are desperate to access lifelines to keep them afloat, which has seen other initiatives, such as those established by the Rupert and Oppenheimer families, swamped by thousands of applications for relief funding.
“Smaller businesses will be the most vulnerable as they typically have lower access to capital, but they collectively have a large impact on the economy. We need to assist them. Our contribution to society at this point is much more important than profits,” said CEO of Willowton, Zubeir Moosa.
The initiative, called the Giving for Hope Foundation, has been established with funds from Willowton, which owns consumer brands such as Sunfoil cooking oil and Allsome rice, which contributed R85m. Al Baraka contributed R10m, with the SA Muslim Charitable Trust adding a further R5m.
The foundation hopes to raise an additional R400m for the fund in the coming weeks.
“We will use our influence to try to obtain funding and donations to take it to a much, much bigger size. The key is job preservation,” says Al Baraka CEO Shabir Chohan.
The fund, through Al Baraka, will seek to provide loans of up to R1m to qualifying small businesses. There is no restriction on those that can apply. However, businesses must be engaged in providing goods and services that are Sharia-compliant; that is, no enterprises involved in activities such as gambling and the sale of alcohol will be eligible. Passive businesses such as investment holding companies will also not be able to apply.
The loans will have a two-year tenure and be interest-free, with no charges levied on the beneficiary or by Al Baraka, which will administer the scheme. Repayments will begin in the second year through equal instalments. Al Baraka expects to begin receiving applications from next week Wednesday with payouts to commence by the end of the month.
The foundation has already appointed Abdul Razak Moosa, Phumzile Langeni and Shauket Fakie as non-executive trustees.
SA Muslim Charitable Trust chair Shoaib Omar said that now is the time for everyone to assist hard-hit and distressed business enterprises. “We all have a responsibility to help put our country back on a sound economic footing. Additional support is going to be vital.”