Cabinet welcomes R3bn business recovery plan

Minister of Trade and Industry Ebrahim Patel
Minister of Trade and Industry Ebrahim Patel/ GCIS

By Kaya 959 Reporter

Cabinet has called on businesses impacted by last month’s unrest to apply for industrial loan support.

Spokesperson Phumla Williams said the loan is provided at zero-percent interest.

The Department of Trade, Industry and Competition and its development finance institutions – the Industrial Development Corporation and National Empowerment Fund, have put together a R3.75 billion Economic Recovery Support package to support various business recovery interventions.

“This includes the rebuilding of infrastructure, equipment, fittings for premises, stock and working capital. The funding will help to alleviate the socio-economic challenges facing businesses affected by the unrest,” Williams said.

A further R340 million package has also been set up by JP Morgan through the Abadali  Equity Equivalent Investment Programme.

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R2bn worth of financing transactions

The Abadali EEIP programme consists of the Abadali Fund, a Black Business Growth Fund, and the Abadali Grant worth R40 million.

“The deployment of JP Morgan’s initial R300 million through the Fund and R40 million through the Grant is expected to result in R2 billion worth of financing transactions and create a minimum of 1 000 jobs over the eight-year period of the Abadali EEIP”

These initiatives will support inclusive economic growth and job creation within the small and medium-sized businesses, particularly in the manufacturing and green economy sectors, according to Williams.

Minister Ebrahim Patel said the funding is intended to support small and medium-sized businesses in sectors of significant public importance, ranging from transactions in the green economy to funding for firms with manufacturing operations.

He said South Africa needs more jobs for young people and deeper levels of industrialisation.

“This transaction will give a boost to the country’s localisation efforts, creating employment and helping to strengthen economic output.

“I welcome the commitment to the creation of new jobs and the focus on supporting a segment of the market that is not adequately served by the financial system,” Patel said.

For more information on the various interventions of the economic rebuilding package click here.