Business Partners has issued a press statement clarifying that the R1 billion Covid-19 support from the Rupert family and Remgro is a donation rather than a loan. But recipients will still be expected to repay, albeit at zero interest over 12 months. Here is the full text of the statement.
Business Partners notes and welcomes all comments and statements shared as part of the national dialogue around the R1 billion funding from the Rupert Family and Remgro Limited. The company would like to stress, that the money made available for small and medium enterprise (SME) support by the Rupert Family and Remgro is in fact a donation. It would also like to reiterate that the administration of these funds is subject to certain criteria. These criteria have been specifically designed in order to sustain the Fund in the long-term. The objective is to administer the donation in a way that will retain capital in the trust after the Covid-19 crisis. The company remains committed to share further details around the criteria, repayment terms and how to apply for the financial aid this week.
That being said, Business Partners would like to confirm the following:
1. Both the Rupert Family and Remgro Limited have provided this funding as a donation dedicated to supporting SMEs in the country. It is important to note that there is no expectation on the part of these two entities to receive anything in return for this donation.
2. Business Partners will be managing these funds on behalf of an independent trust created by the Rupert Family and Remgro Limited.
3. Business Partners will not be profiting from the funding it will be administering. Furthermore, the company has undertaken to perform all duties, directly and indirectly, for zero fees. No fees will be charged in facilitating the financial aid and assistance to qualifying SMEs.
4. Business Partners will make available two distinct and separate assistance programmes for both Formal Sole Proprietors (FSPs) and SMEs to ensure widespread support. We can confirm that the assistance includes both a grant and a grant that will only convert into a loan in 12 months, once the business is on its feet. That means that beneficiaries will have 12 months interest-free with no repayment obligations during this period. The loan will become repayable after 12 months, and incur interest at the prime rate. Administering the funds in this way will ensure that capital will be available to assist SMEs when new challenges are confronted in the future. The repayment of the loan portion is an appeal to the beneficiaries of the initiative to ‘pay it forward’ and allow the continuing support of SMEs into the future.
5. The decision to appoint Business Partners was based on the company’s experience and capacity to provide finance and technical support to SMEs in a sustainable manner. The company has well-established processes and mature governance structures to ensure effective and speedy delivery.
6. The company has extensive experience in managing and disbursing funds on scale, having provided business finance worth over R19.5 billion in over 71 600 transactions facilitating over 651 000 jobs since establishment.
7. The company has previously managed funds for the South African Government as well international development finance institutions such as the International Finance Corporation (“IFC”) and the Swiss State Secretariat for Economic Affairs (“SECO”).