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Relief funding of over R1bn already approved for unrest-hit firms – Patel

Over half of which has already been paid out.
The dtic says the funding aims to restore what has been lost, preserve jobs and help ‘reindustrialise’ the economy. Image: Sibonelo Zungu/via Reuters

Two key development finance agencies under the Department of Trade, Industry and Competition (dtic) have already approved 77 applications amounting to over R1 billion in financial relief for businesses affected by the unrest and looting in KwaZulu-Natal and parts of Gauteng in July, dtic minister Ebrahim Patel confirmed on Tuesday.

The funds, approved collectively through the Industrial Development Corporation (IDC) and the National Empowerment Fund (NEF), are part of the dtic’s broader R3.75 billion relief package for businesses announced by the minister following the unrest.

Read: Mboweni and Mogajane announce R36.2bn in new economic support following unrest

“First approvals were made in August and have been steadily growing, reaching the R1 billion milestone on Monday,” Patel said in a statement.

Ebrahim Patel, DTIC, July unrest, funding relief

Ebrahim Patel, Minister of Trade Industry and Competition. Image: Moneyweb

“The unrest in July 2021 damaged growth, jobs and transformation and affected investor confidence in the domestic economy. To mitigate the damage caused, the dtic and its entities launched a special fund to support companies,” he noted.

“These funding approvals help to inject liquidity into businesses, provide bridging finance where insurance claims are still being assessed and enable firms to commence full trading …

“We have seen many small businesses rebuilding their operations and small and larger firms have provided essential goods to affected communities,” Patel added.

According to the dtic, while the more than R1 billon covers 77 firms that have approved applications, the funding encompass 164 separate properties or sites that were impacted by the looting and destruction.

It noted that the funding approved thus far would support 7 797 jobs across the two affected provinces.

Just over R512 million has been disbursed to hard-hit firms so far.

Read: JP Morgan banks R340m on SA’s SMEs

One such business to benefit from the funding support is Durban-based Kingsgate Clothing, which had four of its properties hit during the riots.

Forms of funding

The IDC and NEF have pointed out that support extended to affected firms comes in the form of term loans at zero interest, bridging finance as well as the conversion of portions of selected facilities into grants.

“These dtic entities are busy with evaluating a number of additional funding proposals and we will be making further announcements on the progress made and on specific projects that have been approved,” said Patel.

The dtic is working with various stakeholders to streamline and co-ordinate contributions towards the rebuilding.

These include:

  • The provincial departments of economic development in Gauteng and KwaZulu-Natal;
  • The Ithala Development Finance Corporation; and
  • The South African Special Risks Insurance Association (Sasria).

The figure of more than R1 billion does not include insurance payouts made thus far by Sasria.

Read:

The dtic noted that it also continues to receive applications under the Critical Infrastructure Recovery Programme aimed at assisting reconstruction efforts and restoring production and jobs in the industrial parks of Ezakheni, Isithebe and Madadeni in KwaZulu-Natal.

It said the IDC is also working alongside several stakeholders to support reconstruction efforts in the retail sector.

“Collaboration and information sharing between [the IDC and NEF] has also allowed us to identify other infrastructure rebuilding opportunities.”

Businesses big and small

The dtic said its financial relief plans extend to formal and informal small businesses in rural and townships areas, with funding made available to six intermediary organisations including Afrika Tikkun, the SA Canegrowers Association and the National Stokvel Association of South Africa.

“These funds will be used to assist small uninsured traders across affected townships with working capital and inventory support to restore their operations.

“The dtic, alongside its entities and sister departments, remains committed to providing the necessary support to businesses of all sizes, in urban, rural and in the township areas to restore what has been lost, preserve jobs and continue our efforts to reindustrialise our economy.”

Palesa Mofokeng is a Moneyweb intern.

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Good work government. 50% of payouts made in just 2 months! Let’s rebuild and continue growing South Africa.

An EFF / ANC coalition : worrying

Nothing to boast about. This is an enditement against the lawless ANC and their supporters.

End of comments.

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