Growing industrialists through partnerships

AS A LEADING funder of broad based black economic empowerment (BB-BEE) the National Empowerment Fund (NEF) has to date approved a total number of 438 transactions since inception worth R4.4 billion, and disbursed over R2.9 billion to 352 black entrepreneurs in fulfilling its continuing mandate to champion economic transformation in South Africa. This demonstrates a meaningful increase in the rate and the speed of funding by the developmental funding agency.

“The NEF is a Development Finance Institution whose mandate entails the promotion of sustainable black economic empowerment,” says Philisiwe Buthelezi chief executive at the NEF.

“The NEF provides financial and non-financial support to its target market. The financial support is in the form of loan funding, quasi-equity and equity funding for purposes of starting a new business, business expansion and the acquisition of equity interests in previously white owned businesses.

“The NEF’s non-financial services are conducted through its pre-investment unit, which provides advice on accessing NEF funding including the compilation of bankable business plans and its post-investment unit that provides on-going monitoring and support to NEF clients,” explains Buthelezi.

She says the port of entry to the NEF for entrepreneurs requiring funding is the pre-investment unit, which provides client liaison. This unit in the previous financial year processed 4 593 enquiries and screened 1 718 applications, which is a testimony to the growing recognition of the NEF as a financier of choice for black entrepreneurs.

Once funded, the NEF investees receive aftercare through the post investment division which is responsible for on-going portfolio management, mentorship and technical assistance, collections management and credit control.

Buthelezi says this division has been able to turnaround seven enterprises with deals valued at R279 million. Had these businesses not been rescued 996 jobs would have been lost.

She says the average year to year collection rate, as a percentage of instalments raised, including additional and catchup payments is 97 percent, which must be viewed against the harsh economic climate that most businesses are currently operating in. the investment portfolio of the NEF now boasts an average risk rating of 46 percent.

In the quest to ensure that black economic empowerment is not restricted to major cities, the NEF now enjoys meaningful presence in seven provinces.