Fast-moving consumer goods manufacturer Willowton Group and faith-based financial services provider Al Baraka Bank have partnered to launch a fund to assist small, medium-sized and microenterprises (SMMES) with loan funding.

The companies have jointly contributed R100-million to launch the Giving for Hope fund, and aim to further grow the fund to R500-million with help from other corporates, or the general public, to assist SMMEs in preserving or creating jobs amid the Covid-19 pandemic.

Willowton CEO Zubair Moosa says Covid-19 has brought with it not only negative health impacts, but also negative economic impacts, especially in vulnerable communities.

He adds that all SMMEs are more vulnerable than before, owing to not having access to resources and not being able to fund losses in the business. This while these businesses are the largest employers in the economy.

Willowton and Al Baraka, as the fund manager, will seek further contributions to the fund in the days following April 8.

The application portal for SMMEs to apply for loan funding will open on April 15.

Al Baraka CEO Shabir Chohan says the fund will charge no interest or administrative costs to businesses, and it does not seek to make a profit. Approved businesses that receive a loan will be required to start with repayments from month 13 following the loan grant.

In other words, SMMEs will not be required to start with capital repayments in the first year of the loan, but repayment is required from month 13 onwards.

Chohan explains that SMMEs whose turnover does not exceed 10% of the Giving for Hope fund’s size can apply. Currently, the fund has R100-million worth of funding available; therefore, businesses with a yearly turnover of less than R10-million can apply for loan funding.

As the fund grows to the targeted R500-million size, businesses up to a yearly turnover size of less than R50-million can apply for loan funding. This information will be regularly updated on www.givingforhope.co.za and the fund’s social media pages.

Moosa notes that all companies that require loan funding are welcome to apply; however, preference will be given to those that can create jobs in this time, or prove that the funds will be used to preserve jobs.

The applicant SMMEs need to be Shariah-compliant, meaning the businesses need to be socially responsible in how they operate; for example, a gambling business will not be approved for loan funding.

Chohan points out that applications will be evaluated on a case-by-case basis, in which the sustainability and justification of funds for each applicant is determined. Al Bakara will endeavour to have a turnaround rate for applications of less than a week’s time.

The fund will soon determine a maximum loan amount that will be given to businesses, which will entirely depend on the extent that they can create jobs or preserve jobs.

Willowton Group produces products including edible oils, rice, sugar, margarines and spreads, as well as beauty, toilet and laundry soaps, candles, and baking and industrial fats. The company’s brands include Sunfoil, Sunshine D, D’lite, Daily, Sona, Eve, Crown, WoodenSpoon and Allsome rice.

Meanwhile, Al Baraka is a subsidiary of the Al Baraka Banking Group, headquartered in Bahrain. The bank offers Shariah-compliant products and services that appeal to both Muslim and non-Muslim clients. The bank upholds the ideal of profit-sharing, while prohibiting the payment or receiving of interest in any transaction.