Gauteng tuckshop owners Neo Motaung and Zodwa Nyathi are fuming as the Gauteng Development of Economy Development has failed to deliver its promises of empowering businesses. Picture: Simon Majadibodu / IOL
Tuckshop owners in Gauteng who were supposed to benefit from a R100 million fund from the Gauteng Department of Economic Development to boost their businesses, are fuming as the department has failed to fulfil its promises.
According to reports, the R100 million Kasi Mnotho Fund was launched in August, in 2021, by the then MEC of Economic Development Parks Tau.
The programme aimed to empower small businesses across Joburg, to secure critical supplies, equipment, machinery, working capital, and strategic loans.
However, local business owners who were supposed to benefit from the programme said it failed to live up to its promises.
The beneficiaries told IOL News that the funds were supposed to be paid to them through an organisation called Family Tree Holdings (FTH), which they allege siphoned off the funds for its own benefit.
One of those, was Neo Motaung, from Katlehong, who runs a juice manufacturing business and claims that the organisation has siphoned off the funds intended to help them.
Motaung said at the end of 2023, he questioned the organisation on what was causing the delay in payments and claims he was then threatened.
“The Family Tree Holdings promised to help us grow our businesses, and when I started asking about the delay of funds they told me to shut up or else they would take my life.”
Motaung told IOL News that he was told by the same people he alleged took the money for their own benefit, that they are politically connected and even if he escalated the issue to the department, nothing would happen to them.
“They lied to us and took the money that was supposed to help grow our businesses. This whole thing is a scam.”
Meanwhile, another tuckshop owner, Zodwa Nyathi, 59, said she was anticipating extending her business with the funding, but now her business was about to shut its doors.
“I had high hopes that the money would assist me to renovate and expand my business, but they sold us fake promises. I am even thinking of closing down the shop because it lacks proper equipment and machinery.”
Nthabiseng Magagula-Msomi, from Thokoza in Ekurhuleni, who owns a small cosmetics shop said they were told to pay a registration fee of R800 and R500 for protection fees by the organisation.
“They told us that if we don’t pay that money they would take us out of the programme. We thought they’re legit, and paid the money. But, even today nothing has happened,” she said.
In response to IOL News questions, Castro Ngobese confirmed that the organisation Family Tree Holdings, was appointed by the department as a partner in the programme.
“The Family Tree Holdings (FTH) was approved following an extensive due diligence. In total the Kasi Mnotho Fund is R100 million. The fund is designed such that any potential partner has to contribute matching funds , meaning that the FTH also contributed R50 million of their own funds.”
Ngobese said the department is aware of corruption allegations and it has taken measures to address them.
“The department takes corruption allegations seriously and has initiated an independent impact evaluation study to assess the programme's overall effectiveness and value,” he told IOL News.
He said that the funds had not yet been disbursed to the beneficiaries and the programme had encountered challenges, with many business owners struggling to qualify to get the funds.
“This was due to various reasons including impaired credit records, operating businesses that are not formally registered.”
“Some applicants are not able to provide basic documents, like financial records which are the minimum requirements for extension of credit.”
Ngobese added that the process of providing funds to the beneficiaries is set to begin this month.
IOL News attempted to get a comment from Family Tree Holdings, but had not received a response before the article was published.
IOL News