The Gauteng Department of Economic Development (GDED) and the Gauteng Enterprise Propeller (GEP) has partnered with the Industrial Development Corporations (IDC) to set up the R450 million Township Economy Partnership Fund aimed at boosting the township economy. This fund made up of R250 million funding from GDED and R200 million from the IDC, was launched ahead of the Township Economic Development Bill passed on March 24 in the Gauteng Legislature.
The Bill enables the Township Economy Partnership Fund (TEPF) to become legally binding for all future Gauteng governments, which presents policy certainty and legal continuity to support SMMEs. GEP CEO Saki Zamxaka said the launch of the funds follows the recent conclusion of a three-year cooperation agreement between the GDED, GEP and IDC, which will see the entities jointly combine, coordinate, and leverage their resources toward supporting SMMEs in Gauteng.
This agreement was concluded in March 2022, paving the way for the opening of the window for applications “The Gauteng Government recognises that township enterprises continue to be disproportionately affected by exceptionally difficult economic conditions. “SMMEs have had to deal with the debilitating effects of the Covid-19 pandemic and the unrest of July 2021 on the economy and their businesses. This has led to the closure of many businesses and the loss of thousands of jobs and livelihoods.
“All these extraordinary events took place when the country was already grappling with a contracting economy that had experienced multiple recessions,” he said. Zamxaka said the Partnership Fund was an instrument to support SMMEs by providing loans or blended finance, which is a combination of a loan and a grant, of up to R10m depending on the application, business needs and affordability of the business.
“The fund will also support those initiatives that can bring wide economic impact to the township economy,” he said. “Sectors that have not been previously recognised formally, such as the Taxi Economy, which includes those SMMEs that support the Taxi and commuter industry, including retail, upholstery, mechanical services will also be supported by the fund.
“Another area of interest relates to the Backyard Real Estate sector which includes amongst others backyard letting and student accommodation. These sectors have been a mainstay for many livelihoods in townships and it is the TEPFs mission to help entrepreneurs in these sectors to grow into sustainable SMMEs,” said Zamxaka.
The IDC will be responsible for managing and administering the TEPF. The adjudication of investment and divestment decisions on behalf of the Fund will be conducted by an Investment Committee which is constituted of members from all parties and independents. The GEP will be responsible for the receipt of applications through its online system and regional offices.