Sefa gives R800m to 40,000 small businesses

More than R800m has been made available to small businesses in South Africa over the past year according to Thakhani Makhuvha, head of Sefa. Image: LinkedIn

Makhuva was briefing Parliament's Portfolio Committee on Small Business Development.

"Our mission is to provide simple access to finance in an efficient and sustainable manner to small and medium enterprises throughout South Africa by delivering wholesale and direct lending credit facilities or products, providing credit guarantees and supporting institutional strengthening of financial intermediaries so that the can effectively assist small enterprises," Makhuvha said.

In his presentation, Makhuvha said Sefa, which is a new development finance institution that was established two years ago, has over the past year spent R822m through various loan funding products to support small businesses.

Over the past two years its payments included:

• At least 10,294 youth-owned enterprises being assisted with loan funding to the tune of R157m;
• A total of 44,302 women-owned enterprises being given funding of R362m;
• Funding of R429m being given to 36,729 rural-based enterprises;

• At least 43 643 black-owned enterprises being paid out R599m in funding.

According to the figures over the past two years Sefa has facilitated or granted loans of more than R1.5bn to small businesses

Private companies provide assistance

The National Development Plan envisages that small businesses will account for 95% of all jobs by 2030. Makhuvha said Sefa was well-positioned to respond to the funding needs of small and medium enterprises.

Sefa offers loans of up to R5m but divided into three streams. Firstly, the development bank does wholesale lending, where finance intermediaries offer applicants loans of between R500 to R5m.

The second channel, called direct lending, allows applicants to Sefa's direct offices and the Small Enterprise Development Agency (Seda) offices to apply for funding of between R50,000 and R5m, while the guarantee schemes channel offers applicants an opportunity to approach formal registered financial institutions that are in partnership with Sefa for funding of up to R5m.

Makhuvha said Sefa had also partnered with key sector companies in launching various funds to support small businesses. These include a partnership where Sefa has joined hands with mining company Anglo-American where each of them have contributed equally to a kitty of R200m to assist small emerging businesses in the mining sector.

He said there was also a partnership with Transnet where small enterprises could apply for funding of up to R5m to cover fuel costs in their field of business.

A separate fund, Makhuvha said, called the Land Reform Empowerment Fund, was available to the beneficiaries of the land reform programme who might, upon inheriting a big piece of land, wish to venture into agriculture or other sectors of the economy.

A tourism fund had also been set up during the recent Tourism Indaba to assist small tourist operators who wish to build guesthouses or buy vehicles for transporting tourists.