National Empowerment Fund -R 950 Million available for black business

The National Empowerment Fund (NEF) has an important role to play in South Africa. It describes its vision as follows:

The NEF’s Vision is to become the leading provider of innovative transformation solutions for an economically inclusive South Africa.

Despite this vision, it has faced challenges in being recapitalised. These challenges have been now overcome, with R 950 million available to support black business in South Africa.  Philisiwe Mthethwa, the Chief Executive Officer of the NEF outlines the available funds, and the approach of the NEF as follows:

“cash that is immediately available to the NEF for new approvals is R950 million. The
NEF has approved over R5.48 billion worth of transactions for 546 black companies, and over the
years R2 billion has been repaid and reinvested. Whilst the NEF’s cash position as at March 2014 is
R1.48 billion, R529 million of that related to undrawn commitments. As a development financier the
NEF is a patient-capital lender with funding horizons of up to 7 years for some products, and up to 10
years in the case of both rural and industrial development transactions. What this means is that the
NEF’s loan portfolio is still in the economy, and will eventually be repaid for reinvestment purposes”.

 

NEF – Products and Services

The application process to access funds is described on the NEF website. The main sources of funding are:

1. Imbewu Fund: This fund is designed to support black entrepreneurs wishing to start new businesses as well support existing black-owned enterprises with expansion capital. The Fund supports these entities by offering debt, quasi-equity and equity finance products with the funding threshold ranging from a minimum of R250 000 to a maximum of R10 million.
2. Umnotho Fund: This Fund is designed to improve access to BEE capital and has five products: Acquisition Finance, Project Finance, Expansion Finance, Capital Markets Fund, and Liquidity and Warehousing. These products provide capital to black-owned and managed enterprises, black entrepreneurs who are buying equity shares in established black and white owned enterprises, starting new ventures, expanding existing businesses and BEE businesses that are or wish to be listed on the JSE.
3. Rural and Community Development Fund:  This fund was designed to promote sustainable change in social and economic relations and supporting the goals of growth and development in the rural economy, through financing of sustainable enterprises. This would be achieved through the mobilisation of rural communities in legal entities or cooperatives, in order to participate in the broader economic activities and realise the economic transformation goals in rural South Africa. The fund has four products: Project Finance, Business Acquisition, Expansion Capital and Start-up/Greenfields with the funding threshold ranging from a minimum of R1 million to R50 million.
4. Strategic Projects Fund: SPF’s sector focus is informed by the government’s strategies on industrial development through the dti’s National Industrial Policy Framework, the corresponding Industrial Policy Action Plans [IPAP] as well as the current government economic growth strategy, the New Growth Path. A full list of sectors is available on the NEF website. Click here.

NEF – Contact Details

Please contact the NEF directly for assistance on application and questions of clarity. Details are provided below:
West Block, 187 Rivonia Road, Morningside 2057
PO Box 31, Melrose Arch, Melrose North 2076
Tel: +27 (11) 305 8000 | Fax: +27 (11) 305 8001
Call Centre: 0861 843 633 / 0861 (THE NEF)
applications@nefcorp.co.za (Funding)
info@nefcorp.co.za (General)
Image Credit: Screenshot from official NEF Press statement