The Gauteng provincial government, the Industrial Development Corporation and the SA SME Fund have set up what they characterise as a “game changing” R300-million SMME Crisis Partnership Fund for small businesses in the province.
The SMME Crisis Partnership Fund is aimed at correcting this. Each of the three partners has contributed R100-million towards the fund, with the provincial government providing a first loss guarantee, which means it will compensate lenders should the borrower default. The three intermediaries are Indlu Living, which helps homeowners fund the development of backyard rooms and helps place tenants via an app; Profit Share Partners, a fintech company that offers finance to small businesses; and Crede Capital Partners, a financial services firm offering transaction advisory services, risk and investment management services. They will begin offering working capital and asset finance to hundreds of small businesses and entrepreneurs.
“At the end of the loan period, which is five years, the homeowner would be an entrepreneur who rents out many rooms… They would be earning both an income and creating intergenerational wealth because after five years, their home would be worth considerably more than before. They are micro entrepreneurs, who are using their RDP house as an asset that they can leverage in the way that middle-class people use their properties as assets,” Manning said.
“With those kinds of loads, you can recycle, you know, R30-million in loans many, many times in the course of a two-year period, which is the size of this fund. The partners will be supporting many hundreds of businesses, because they will be using the same capital. We are also providing funding to a few others who we haven’t yet signed.”
So there is funding for building back rooms. Ok. Do we have sufficient infrastructure to cater for this increase in residents? This is just cycle to keep us landless. EFFSouthAfrica
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