Willowton to the rescue

2020-04-09 14:00
PHOTO: nokuthula khanyile Seven students (from left) Mthokozisi Madondo, Sindiswa Magwaza, Babuse Mthethwa, Yonelisa Mbuzi, Zethembe Ngcobo, Tholigunya Ngwabe and Lwazi Dladla received bursaries from the Willowton Group.

PHOTO: nokuthula khanyile Seven students (from left) Mthokozisi Madondo, Sindiswa Magwaza, Babuse Mthethwa, Yonelisa Mbuzi, Zethembe Ngcobo, Tholigunya Ngwabe and Lwazi Dladla received bursaries from the Willowton Group.

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Struggling small, medium and micro enterprises (SMMEs) have been thrown a lifeline through a new fund set up by the Willowton Group and Al Baraka Bank.

The Pietermaritzburg-based agro-processing business and its shareholders have pledged R85 million to the Giving For Hope Foundation (GFHF).

A further R10 million has been donated by Al Baraka Bank, with the South African Muslim Charitable Trust giving R5 million to seed the fund.

It is just a start, however, with Mahomed Zubeir Moosa, chief executive officer of the Willowton Group and founder of the GFHF, saying that they hope to increase the R100 million already pledged to R500 million in the next few weeks.

The news of the new SMME fund follows a warning from the South African Reserve Bank that the 21-day lockdown could result in 370 000 job losses and lead to 1 600 businesses going under.

The Institute of Race Relations (IRR) said anxiety among employers and employees across the country has been heightened by speculation that the Covid-19 lockdown could be extended.

The organisation also warns that growing desperation among the jobless and the hungry poses a heightened risk of non-compliance with isolation measures, and of exposing more vulnerable South Africans to infection.

Moosa said he had seen first-hand the impact the lockdown was having on small businesses, adding: “Many of them don’t have access to capital and funding from conventional institutions.

“As one of the largest employers in the local economy I felt that we needed to do something, so I spoke to our shareholders. I told them we needed to put making a contribution to society ahead of profits. They were quick to get behind me.”

Moosa then got in touch with Shabir Chohan, chief executive of Durban-based Al Baraka Bank Limited in South Africa, who agreed to get involved and to administer the fund free of charge.

Chohan said: “We have to get the economy back on track because the current situation is having a devastating effect on people.”

The GFHF will give small business owners the chance to apply for a two-year interest-free loan. No money needs to be paid back in the first year, with repayments being split into 12 monthly instalments in the second.

Moosa said the loans would be open to all SMMEs irrespective of sector, race, gender or religion, with the only exceptions being those which are not fully Shariah-compliant. These include property investment, alcohol and gambling-related enterprises.

He added that one of the main reasons for the establishment of the GFHF is job creation and preservation.

Moosa said the trustees — Chohan, Abdul Razak Moosa, Phumzile Langeni and Shauket Fakie — would, therefore, consider the number of employees employed by each business.

“The whole intention [of the fund] is to keep people in their jobs. We want to encourage people to not retrench — and part of this process has to be to assist businesses in distress.

“The way we see it, each job feeds at least five people and so we are contributing to a long-lasting economy and hopefully a better future for our country,” he added.

Melanie Venness, chief executive officer of the Pietermaritzburg and Midlands Chamber of Business, said it was “heartening to see big business stepping up to the plate to help small business and save jobs, in what can only be described as a time of economic catastrophe for many”.

She added that she was impressed that the fund was open to all Shariah-compliant SMMEs, adding: “Extending this lifeline will change the trajectory of many people’s lives — owners of businesses and those of their employees and their families.”

The news was also welcomed by the Small Business Institute’s John Dludlu, who said it was especially important to support medium-sized firms that had been running for several years.

“They have more potential to employ more people and to bounce back when the economy recovers. It’s a lot cheaper to save an existing business than to start a new one.

“These businesses are also formally registered. They pay tax and UIF and employ some 3,9 million people. We cannot afford for four million people to become unemployed,” he added.

South African Muslim Charitable Trust (SAMCT) chairperson Shoaib Omar said the organisation was delighted to contribute to a cause dedicated to assisting hard-hit 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 going forward,” he added.

The GFHF intends appointing 10 fund ambassadors to raise money for the foundation. Mahomed Zubeir Moosa and Ahmed Shoaib Moosa from the Willowton Group, Mohammed Kaka from Al Baraka Bank, Fatima Vawda from 27four Investment Managers and Suzanne Ackerman-Berman from Pick n Pay have already accepted the challenge and plan to connect with other corporates and individuals to encourage them to help the fund reach its goal of having R500 million in the kitty.

Applications open on Wednesday, April 15 and can be made through the fund’s website www.givingforhope.co.za

Read more on:    pietermaritzburg
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