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- Sanlam Investments' SME Debt Fund has committed to provide R110 million in debt relief capital to three South African businesses.
- This could preserve 630 jobs and create a further 356 jobs, Sanlam Investments said in a statement.
- The debt relief capital is part of an impact fund initiative that it Sanlam launched earlier this year in response to the Covid-19 pandemic.
Three Small and Medium Enterprises (SME) are set to benefit from R110 million in debt relief capital, provided through Sanlam Investments' SME Debt Fund.
The financial services provider issued a statement earlier this week in which it indicated that it expected as many as 630 jobs to be preserved and a further 356 to be created from the latest commitment.
This debt relief capital is part of an impact fund initiative launched by Sanlam Investments, a subsidiary of Sanlam, earlier this year to support businesses in the wake of the Covid-19 pandemic.
The initiative is targeted at companies which have viable and sustainable business models, but which require funding due to the impact of the Covid-19 lockdown restrictions on their operations. It comprises three impact funds – the SME Debt Fund, the Mid-Market Private Equity Fund and the Corporate Debt Fund. Sanlam provided seed capital of R2.25 billion, with the hope that a further R4.75 billion would be raised.
- READ | 'Every single job counts': Sanlam Investments launches 3 funds, targets R7bn to aid businesses
The SME Debt Fund is specifically targeting to raise R1 billion at least. Its first round of investments commitments, which closed on 1 September, secured R250 million. A further R100 million was raised at the second close on 30 November, Sanlam said in the statement.
"Our hope remains that other institutions and retirement funds will commit capital to the three funds so we can have an even greater impact," said Sanlam Investments' head of alternatives, Mervyn Shanmugam.
Mettle Administrative Services - which for the past 15 years has been providing working capital finance, mainly to panel beaters - and Retail Capital - which offers merchant cash-advance lending to SMEs in retail and hospitality industries – were two of the first beneficiaries.
Black-owned specialist retailer Oilstar is the third beneficiary and the funding is expected to provide job security to 630 current employees, mainly from low-income households, Sanlam said.
"Oilstar expects to open two further sites in 2021, which will lead to the creation of further onsite jobs as well as indirect employment through its range of service providers," the statement read.
