THE National Empowerment Fund (NEF) has approved the release of R1-billion in funds for small businesses affected by the 2021 July unrest.
The NEF achieved this with the assistance of the Department of Trade, Industry and Competition (dtic) as well as the Solitary Fund’s Humanitarian Crisis Relief Fund (HCRF).
“The civil unrest was far-reaching and severe, resulting in damage estimated in excess of R30-billion with more than 150 000 jobs placed at risk,” says NEF CEO Philisiwe Mthethwa.
“The manufacturing and retail sectors were dealt the hardest blow, and 161 malls in KwaZulu-Natal and Gauteng experienced severe damage to property and stock.
Two-hundred shopping centres and approximately 3000 stores were looted with stock losses reported at over R1.5-billion. “Some NEF investees were also caught in the crossfire” says Mthethwa.
Government, through the dtic, had set aside R5.15-billion to rebuild damaged businesses, save jobs and restore the provision of goods and services to affected communities.
“The dtic allocated a total R650-million for the NEF to come to the rescue of the businesses that were affected by the unrest. The NEF set aside R100-million from its own balance sheet, while the Solidarity Fund entrusted R273-million for the NEF to provide a concessionary blended facility to affected businesses.
“The total funds under the management of the NEF for the Economic Recovery Fund amounted to just over R1-billion, which has since been approved for the benefit of the businesses that were damaged during the riots,” says Mthethwa.
Criteria for funding
To qualify for funding, applicants had to be a registered company, close corporation or co-operative in good standing with the South African Revenue Services.
Applicants were also required to demonstrate that jobs lost would be restored or increased within 12 months of receiving the funding, and demonstrate that they were negatively-affected by the riots and unrests. The mandate of the NEF is to support black economic participation, so the beneficiary enterprises had to be owned and managed by black entrepreneurs.
Reversing the devastation
For the effective implementation of the post unrest relief, the NEF deployed teams of investment professionals across both provinces a week after the riots subsided.
These teams comprised finance and risk assessment specialists, engineers, legal advisors and others, who were deployed directly to the trouble spots to interact with and assist entrepreneurs whose businesses had been harmed and whose operations had ceased as a result.
“The teams were deployed over a period of several weeks. NEF investment teams engaged different stakeholders including entrepreneurs, local government, property owners and business organisations,” says Ms Mthethwa.
