National Empowerment Fund

The micro-finance industry in South Africa is estimated to be R50 billion. Studies have shown that only 6% is loaned to small businesses while the rest are consumer personal loans which are mainly used to meet pressing personal needs like school fees,medical expenses,home renovations and even just taking a holiday. With South Africa’s history of social and economic inequality,there is a still a huge gap around the market to provide more finance and credit. One institution playing a major role in this regard is National Empowerment Fund(NEF).

Established by the National Empowerment Fund Act no 105 of 1998,the National Empowerment Fund is a driver and thought leader in promoting and facilitating black economic participation by providing financial and non-financial support to black empowered businesses,and by promoting a culture of savings and investment among black people.

NEF anticipates future funding and investment requirements to help black individuals,communities and businesses achieve each element of the codes of good practice.These include a focus on preferential procurement,broadening the reach of black equity ownership,transformation in management and staff and preventing the dilution of black shareholding. NEF funding solutions are divided into iMbewu Fund,uMnotho Fund,Rural and Community Development Fund as well as Strategic Projects Fund.

iMbewu 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.

uMnotho Fund is designed to improve access to BEE capital and caters for Acquisition Finance,Project Finance,Expansion Finance,Capital Markets Fund as well as Liquidity and Warehousing. Rural and Community Development 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.

Strategic Projects Fund is a unit of the NEF established with a mandate to increase the participation of black people in early stage projects.This unit seeks competitive opportunity for the South African economy and the inclusion of black participation in opportunities at the outset of projects,as opposed to doing so during equity closure.

National Empowerment Fund (NEF) can be contacted on 0113058000