A new R300 million SMME crisis partnership fund was launched in Johannesburg to assist small businesses based in Gauteng townships.
It’s hoped that the two million township-based entrepreneurs, who are unable to access funding from formal banking institutions will benefit from the fund.
Gauteng Provincial Government, the Industrial Development Corporation, and SA SME Fund each contributed R100 million to the fund.
The Gauteng Provincial Government’s share provides the first-loss guarantee, meaning it will assume the first portion of any losses.
The township economy is largely sustained by small businesses, often lining up major routes. Access to funding for small medium and micro enterprises is generally hard to come by.
For some township entities, it’s even harder because of the nature of their business. The SMME crisis partnership fund seeks to address the economic inclusion of township businesses in Gauteng.
“This money is going to be given to survive or grow,” says SA SME Fund CEO Ketso Gordhan.
The partners believe this model, which leverages the government’s underused first loss capital to attract private sector funding is a game-changer.
They believe the availability of funds to SMEs will reignite the township economy and elevate it to respond to the current needs of society.
“We’re creating financing facilities, that we currently have,” says Gauteng MEC for Economic DevelopmentParks Tau.
So far, the fund has already committed to six intermediaries with a seventh in the pipeline.
One of the intermediaries is Indlu Living, which provides micro property and backyard developers in townships with an all-in-one rental management software, finance, and property development solution.
The SMME Crisis Partnership Fund will double Indlu Living’s loan book, enabling it to create between 60 and 70 new property entrepreneurs.
VIDEO: R300 million SMME crisis partnership fund for township-based entrepreneurs