The NEF processes funding applications by black businesses for start-up, expansion and equity acquisition objectives through its Fund Management Division (FMD). FMD is structured into two funding operations, namely the Corporate Fund and the iMbewu Fund. The Corporate Fund offers several products aimed at improving access to BEE capital, namely Acquisition Finance, Project Finance, Expansion Finance, Capital Markets Fund and Liquidity and Warehousing. Corporate Funding ranges from R5 million to R100 million. The iMbewu Fund is a suite of products aimed specifically at black entrepreneurs wanting to start new businesses as well as supporting existing black-owned businesses with expansion capital. iMbewu products include entrepreneurship finance, procurement finance, franchise finance, rural and community development projects. Here funding ranges from R250 000 to R20 million.            

Importantly, the NEF plays a critical role in the implementation of the Codes of Good Practice (the Codes) that emanate from the Broad-Based Black Economic Empowerment (BB-BEE) Act of 2003. NEF CEO, Ms Philisiwe Buthelezi, says the NEF product offering was designed to address the funding challenges relating to the achievement of the seven pillars of the Codes – ownership, management control, employment equity, skills development, preferential procurement, enterprise development and socio-economic development. “Accordingly, we measure and assess the NEF’s impact not only on the basis of financial return, but in accordance with what we refer to as the ‘Empowerment Dividend’, an investment methodology which enables the NEF to pursue national priorities such as BBBEE, the DTI’s industrial policy objectives and the targeted government programmes such as the Accelerated and Shared Growth Initiative for South Africa (ASGISA),” she adds.

The NEF has developed funding criteria it believes offer the most meaningful possibility for optimising black economic transformation. While it places precedence on commercial viability, other softer measures and indicators also enjoy corresponding rank, such as:

 

• Compliance with all relevant laws

• Black management and operational involvement

• Risk sharing by entrepreneurs

• Black women empowerment

• Community involvement

• Black ownership compling with the NEF product criteria

• Job creation

• Geographic location of business

 

While these measures form part of the developmental ethos, the NEF has adopted as the underlying theme of its strategic plan, ensuring that it funds those businesses that demonstrate commercial viability as well as reasonable prospect for success.

In response to the constraints facing some black entrepreneurs, such as the challenge in producing top-quality business plans and the lack of accurate and reliable financial information from applicants, the NEF has developed a comprehensive online Business Plan tool, due to be made available to the public on the NEF website, www.nefcorp.co.za. The tool is designed to assist applicants in improving and refining the quality of their business plans.

The NEF has two non-financial businesssupport units. The Pre-investment Business Unit comprises five professionals that review on average 100 applications per month, and assists entrepreneurs in navigating the necessary application procedures. This unit also helps with funding advice, business planning and general assistance to ensure applications are of good quality, if the original business plan is sound and has strong viable merit.

 

 

Secondly, the Post-Investment Business Unit is a specialized team comprising seven professionals, and has a formal structure that monitors the NEF’s investees’ performance for risk, and provides ongoing business support when required. This support includes free mentorship and business coaching to its existing clients.

 

The NEF will also be investing R8m in the development of a Mentorship Panel as an extension of its Post Investment support. The panel will be launched in due course and will include experts in various business disciplines located throughout the country. The services of the panel would be available to NEF investee companies within certain guidelines, free of charge.