The Coronavirus pandemic has had a devastating effect on small businesses in our region, as is evidenced by the empty shops and the number of folk who are now out of work and dependent on social welfare grants. Hermanus Siyakha, the organisation that provides small, interest-free loans and supportive mentoring to small businesses has not escaped the impact of the last six months. While not able to process new loans, and with most businesses in lockdown, we were nevertheless able to provide some humanitarian assistance by way of grant offers to needy business owners.
Of the 26 businesses who were recipients of interest-free loans before the lockdown announced in March, most have been unable to operate over the past few months. Throughout this time our mentors remained in contact with business owners, offering encouragement and moral support during this very difficult period. In addition, all borrowers were granted an extended moratorium on loan repayments, although a number were able to continue monthly capital repayments, largely because of alternative income sources.
The good news is that with the phased lifting of lockdown restrictions, 14 businesses have been able to recommence operations, some of them with the assistance of additional start-up finance from Hermanus Siyakha. A further seven enterprises are dormant and are waiting for market conditions to improve. These businesses are largely in clothing and non-essential goods. The remaining five businesses appear unlikely to recover, although we continue to offer what support and encouragement we can.
At the moment Hermanus Siyakha has in excess of R85 000 that has been loaned to existing borrowers, excluding loans that have already been fully repaid. We are very thankful that, due to the continued support of our funders even in these very difficult economic times, our financial position remains healthy.
Given the lessons learned over the last year and particularly during the pandemic, Hermanus Siyakha is in the process of rethinking our business model. We are excited about the possibilities of extending our focus to include more established micro and small enterprises which function well and are in need of both cash injections and mentoring support. These businesses could be located throughout our Overstrand community, not necessarily limited to areas of disadvantage.
In this regard we are hoping to be able to augment our present crowd-funding model by partnering with like-minded organisations to provide funds for this extended vision. We are also adapting our mentoring model to make provision for the challenges that the Covid-19 pandemic presents and to ensure that the expertise of mentors is optimally utilised.
Unfortunately, because of the restrictions currently in place we have not been in a position to process and issue new loans or engage new mentors. However, we are using this time to position Hermanus Siyakha to be able to make an even more significant impact on the small business sector through the availability of interest-free loans and mentoring once the situation allows. We are excited to be entering a new phase in our mission to transform communities by building relationships and growing businesses.