Willowton and Al Baraka throw lifeline for SMMEs with R100m initial funding

By Al Qalam Correspondent

Small, Medium and Micro Enterprises (SMMEs) that have been crippled by the COVID-19 pandemic could receive much needed financial lifelines to help them survive and recover after the lockdown is lifted.

 A group of businesses, led by Willowton Group and Al Baraka Bank, have joined forces to provide this urgently needed financial aid through the creation of the Giving For Hope Foundation (GFHF)

Speaking at the webinar media launch of the GFHF, MahomedZubeirMoosa, chief executive officer of Willowton Group and founder of the GFHF, said that a combined loan of R8- million from Willowton Group and its shareholders, together with R10-million funding by Al Baraka Bank and R5-million from the South African Muslim Charitable Trust, will form the start-up capital for the trust.

The aim is to launch with R100-million, and Moosa called on businesses across the country to loan money to the GFHF with the ultimate aim of raising R500-million within the next few weeks.

This will be split into small loans which will be effective for two years. Businesses will only need to begin to repay the loans, in 12 monthly installments after the first year. The loan will be interest-free, profit free and admin-cost free basis. The fund will be administered by Al Baraka Bank.

 All lending to be fully Shariah-compliant and will meet FICA and other banking regulations. Moosa said that loans would be open to all SMME’s irrespective of sector, race, gender or religion. However, loans would not be advanced for passive income type businesses such as property investment or alcohol or gambling related businesses.

As one of the main reasons for the establishment of the GFHF is job preservation. There will be a direct link between the quantum of loans and the number of employees employed by potential clients. “Our duty as large businesses in South Africa extends beyond generating shareholder wealth. The whole intention 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 effect of COVID19 on developed economies has been huge and as this virus spreads to emerging markets like South Africa, one can hardly imagine the impact that it will have. With a three-week general lockdown, we are already seeing multiple large enterprises seeking protection from bankruptcy. This has a ripple effect. The biggest impact will be felt by SMMEs and their employees,” Moosa said.

Durban-based Al Baraka Bank’s chief executive, ShabirChohan, who is a trustee of the GFHF added: “The South African economy is being exceptionally hard-hit with the COVID-19 and attendant, though necessary, lockdown coming hard on the heels of another rating downgrade and the lasting effects of load-shedding. As a responsible corporate citizen, the bank believes it must respond to government’s requests for business to assist in boosting the economy in the face of the COVID-19 pandemic. We intend to assist SMMEs facing devastating hardship because of the loss of business activity, consumers remaining at home, decreased production and the attendant increase in costs.”

South African Muslim Charitable Trust (SAMCT) chairman, Shoaib Omar, said the organisation was delighted to contribute to a cause dedicated to assisting 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 going forward.”

Commitment by funders must be made by the end of April and funding to be in by the end of June 2020.

The GFHF will appoint a maximum of 10 fund ambassadors to raise funds (loans) for the foundation. The initial five ambassadors to be appointed are MahomedZubeirMoosa and Ahmed ShoaibMoosa from Willowton Group, Mohammed Kaka from Al Baraka Bank, Ms Fatima Vawda from 27four Investment Managers and Ms Suzanne Ackerman-Berman from Pick ‘n Pay.

Loan applications should be made to https://givingforhope.co.za/will be accepted from potential clients from 15 April with payouts to clients expected to begin by the end of April. 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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