By Chris Bishop
South Africa’s billionaire small business rescue funds are being run off their feet as thousands dash for cash that could secure survival for their business and workers in the COVID-19 lockdown. It may be a drop in the ocean, with an estimated five million small businesses in South Africa, but it may save many from going under.
The billion Rand fund set up by the billionaire Rupert family is temporarily suspended as it is oversubscribed by nearly three times the amount offered when the fund launched on Friday.
Organisers of the Oppenheimer fund, also for a billion Rand and administered through the big four banks, believe it will be exhausted within the next three weeks.
Nicky Oppenheimer, the patriarch of the family, told CNBC Africa that they were persuaded to put up the money by his grandson Sam – a 24-year-old management consultant with a first in physics from Oxford University.
“We are running to stand still at the moment. Teams are working around the clock to process thousands of applications,” says Bridget Fury, a spokesperson for the Oppenheimer fund called the South African Future Trust.
The fund, which also opened on Friday, believes it can save around 88,000 jobs in small businesses during the lockdown and says 10,000 businesses this week applied for relief. If successful their employees will be paid R750-a-week, over 15 weeks, with an interest free loan.
“We are leaving the banks alone so they can apply their policy and distribute the money,” says Fury.
The applicants reflect a cross section of South African small business: a wine bottling company with three employees and facing closure; a private school; a travel agent; a beauty parlour; a company supplying solar power for households wanting to go off the grid along with scores of shops and restaurants.
The Oppenheimer family also plans to launch an emergency fund, in the next few days, to help vulnerable communities, NGOs orphanages and old age homes.