24 February 2014
State company Transnet has partnered with the Small Enterprise Finance Agency (Sefa) and resources giant Anglo-American to launch a R165-million fund to help small black-owned companies become the rail utility’s suppliers.
Anglo-American’s enterprise development arm, Zimele, Transnet and Sefa, a subsidiary of the state-owned Industrial Development Corporation (IDC), will each contribute R55-million to the newly established Godisa Supplier Development Fund.
“The aim of the fund is to promote growth and sustainability amongst existing and potential black-owned suppliers of Transnet in the rail engineering and freight services,” Transnet Group CEO Brian Molefe said in a joint statement issued after the launch of the fund in Pretoria on Friday.
“It is also our intention to foster enterprise development in such a way that recipients will be able to create new jobs in the communities in which they operate,” Molefe added.
Godisa will offer offer loans and capital advances, as well as free business and technical support, to qualifying beneficiaries. R150-million of the total fund will be used for investment financing over a 10-year period, with the remaining R15-million going on support services.
Public Enterprises Minister Malusi Gigaba, speaking at Friday’s launch, said: “Of the country’s almost five-million small and medium entrepreneurs, 70% don’t survive beyond 18 months due to issues such as a lack of access to funding.
“This is something that our economy will not self-correct,” Gigaba said, adding that the economy would not recover or achieve social inclusion without partnerships to correct market inefficiencies.
He said the fund would help to encourage young black people who had aspirations to be entrepreneurs and suppliers of light and heavy manufactured products to access funding.
“We need to increase our appetite for risk, take a hand-holding approach and trust black people as capable entrepreneurs so that we don’t build the economy on the back of fronting entrepreneurs with no experience or skills.”
According to the three partners, all applications for funding will need to take the form of an investment proposal accompanied by a formal business plan. Potential recipients will then have present their business case to a committee consisting of the Godisa fund manager and representatives from the various contributors.
Once a business case is accepted, a due diligence process will be undertaken to ensure that the company is legally and financially compliant. Godisa will help companies to complete the relevant documentation and meet their compliance obligations.
“Enterprise development has become a vital source for job creation and poverty alleviation in South Africa,” Zimele chairperson Khanyisile Kweyama, the executive director of Anglo American in South Africa, said at the launch. The fund, she said, would “provide more opportunities where entrepreneurs and small to medium enterprises can grow within Transnet”.
Sefa CEO Thakhani Makhuvha said the fund would help to address “the liquidity challenge curently prevalent in supply chains by making funding accessible to black-owned SME suppliers”.
SAinfo reporter and SAnews.gov.za