The South African business sector has faced a number of challenges post-apartheid. There have also been a few developments over the years targeted specifically at empowering the previously disadvantaged black community. The National Empowerment Fund was established to be a provider 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.
The National Empowerment Fund plays a key role in the transformation of the South African business market.
Its funding categories are divided into 4 sections, which fulfil particular objectives:
- iMbewu Fund provides entrepreneurship finance, procurement and finance.
- The UMnotho Fund designates funding for acquisition, new ventures, expansion capital, capital markets, liquidity and warehousing.
- The Rural and community development fund drives funding towards acquisition, new ventures capital and expansion capital.
- The Strategic Projects Fund is dedicated to solely empowerment objectives.
The National Empowerment Fund fulfils its mandate through differing mechanisms, such as asset management, fund management and the strategic projects fund. Asset management means that NEF is the custodian of certain equity allocations in state allocated investments. The fund management division prioritises the provision of financial and non-financial solutions across a range of sectors to black empowered businesses 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.
NEF aims to provide funding fulfilling the BB-BEE elements of good practice, such as preferential procurement, broadening the reach of black equity ownership, transformation in management and staff as well as preventing the dilution of black shareholding.
The application procedure is a 6-step process taking the form of a screening of the application form, submission to investment committee, due diligence process, a re-submission of a final report, legal process and procedures and disbursement.
The National Empowerment Fund can be contacted by calling 011 305-8000.