The National Empowerment Fund (NEF) was established through act No 105 of 1998 to be the promoter and facilitator of black economic participation by providing financial and non-financial support to black empowered businesses and promoting a culture of savings and investment among black people. Since its formation, the NEF has become a leading provider of innovative transformation solutions for an economically inclusive South Africa.
The NEFs mandate does not run in isolation because it complements other development finance institutions by allowing these organisations to work in close collaboration in the promotion of BB-BEE. The NEF however sets itself apart by assuming a predominantly equity based risk to maximise the empowerment divident. The NEF has three ways of implementing its mandate and these are asset management, fund management and strategic projects fund. Asset management deals with NEF being a custodian of certain equity allocations in state allocated investments. Fund management provides financial and non-financial solutions accross a range of sectors to black empowered busineses for start up, expansion and equity transformation purposes. The strategic projects fund provides project finance and private equity in projects once they are regarded as bankable.
Government has also continued to depend on NEF to achieve BB-BEE elements of good practice, these include preferencial procurement, broadening the reach of black equity ownership, transformation in management and staff and preventing the dilution of black shareholding.
The National Empowerment Fund (NEF) is indeed playing a key transformation role in South Africa.