Hope Foundation helps save 1 000 jobs

By Al Qalam Correspondent

The Giving for Hope Foundation (GFHF) – a non-profit organisation created by a group of large businesses during the height of the Covid-19 crisis and economic lockdown – has saved over 1 000 jobs to date and extended an invaluable lifeline to the struggling Small, Medium and Micro Enterprises (SMMEs) sector that has been crippled by the pandemic, according to its chairman, Razak Moosa.

Moosa said the GFHF, which was set up by larger businesses to assist their smaller counterparts, had approved loans to the value of R32-million. A further R30-million worth of loans are currently being processed. It is expected that all loan applications will be finalised in the next few months.

The fund, which started with a combined loan of R85-million from Willowton Group and its shareholders, R10-million from Al Baraka Bank and R5-million from the South African Muslim Charitable Trust, now has a total of R139-million in funding to make available to needy SMMEs.

Applications for loans, which were invited from business owners irrespective of sector, race, gender or religion, are now closed.

Moosa said that the GFHF had received 1 220 applications for assistance, collectively valued at R620-million. These came from the retail, manufacturing, construction, transport, technology, agricultural and property sectors throughout the country.

The fund, which is administered by Al Baraka Bank in line with Shariah principles and complies with both FICA and other banking regulations, has unfortunately found that many applicants were not compliant.

This is just one factor that has historically contributed to an already high failure rate of SMMEs in South Africa even before the disruptions caused by the pandemic.

Last year, government estimated that small to medium-sized businesses made up about 91% of formalised businesses in this country, employed about 60 percent of the labour force and accounted for as much as 34% of South Africa’s GDP. However, the Department of Trade and Industry has also noted that the failure rate of small businesses is extremely high with more than 70% failing within the first two years of start-up and 96% failing to reach their 10th birthdays.

The economic aftereffects of the Covid-19 lockdown will exacerbate this, Moosa said.

“We intend to assist the most deserving small to medium-sized businesses facing devastating hardship because of the loss of business activity, the result of consumers remaining at home, decreased production and the attendant increase in costs. South Africa is facing unprecedented economic hardship and it is in the best interests of every stakeholder – government, the private sector, organised business and labour – to contribute towards rebuilding the economy. We believe that the mobilisation of funds will – and is – positively impacting businesses battling for survival, ensuring the retention of jobs. By joining forces, our association of businesses is able to offer South Africa’s wider business community an urgently required lifeline,” he said.

Jameel Khan, head of Projects at SAICA Enterprise Development added: “We are proud to be part of the solution and The Giving for Hope initiative to assist small businesses during these challenging and uncertain times. At SAICA Enterprise Development, we believe in growing South Africa’s entrepreneurial ecosystem by advancing the sustainable growth of small businesses. Thus we are pleased to play an active role in initiatives that can influence and support financial excellence and stability in small businesses.”

The loans will cover a two-year period. Businesses only need to begin repaying the loans, in 12 monthly installments, after the first year. Each loan is interest-free, profit free and free of administrative costs.

As all loans are expected to be repaid to the GFHF by the end of December 2022, the trust will repay loans to contributors and cease operating by February 2023.

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