THE NEF PRESENTATION About the NEF 2 NEF Mandate Established by - - PowerPoint PPT Presentation

THE NEF PRESENTATION

About the NEF

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NEF Mandate…

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Established by the National Empowerment Fund Act No. 105

• f 1998, the NEF is a driver and

a thought-leader in promoting and facilitating black economic participation through the provision of financial and non-financial support to black empowered businesses, as well as by promoting a culture of savings and investment among black people.

The NEF is an agency of the dti and is the

• nly DFI exclusively mandated to grow

B-BBEE

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NEF Funds

Fund Focus Threshold 1 iMbewu Fund SME Fund providing Entrepreneurship, Procurement & Franchise Finance R250 000 – R10 million 2 Women Empowerment Fund (WEF) Achieve minimum 40% of enterprises owned and managed by black women R250 000 – R75 million 3 Rural & Community Development Fund Supporting rural economic development through New Ventures, Acquisition, Expansion & Greenfields Finance R1 million – R50 million 4 uMnotho Fund Funding of New Ventures, Acquisition, Project Finance, Expansion, Capital Markets, Liquidity & Warehousing R2 million – R75 million 5 Strategic Projects Fund Early-stage investment in industrial / manufacturing transactions Up to R75 million

Product / Fund Description Funding amounts

Entrepreneurship Finance For starting a new business R250 000 – R10 million Procurement Finance For tenders and contracts R250 000 – R10 million Franchise Finance For pre-approved franchise licenses R250 000 – R10 million Acquisition Finance For black investors acquiring a stake in medium to large companies R2 million – R75 million Expansion Capital For growing an existing business R250 000 – R75 million *New Ventures Finance Participation in green-field projects R5 million – R75 million Capital Markets Listing on the JSE or its junior Altx markets R2 million – R75 million Liquidity and Warehousing The NEF has Black Facilitator status, which can help black shareholders and companies wishing to sell a stake while keeping the shareholding black R2 million – R75 million *Rural and Community Development Fund for agri-processing, tourism, mining & beneficiation, manufacturing etc R1 million – R50 million *Strategic Projects Fund Venture-capital fund investing in early-stage projects for the purpose of developing strategic industrial capacity in poverty nodes, in renewable energy, business process outsourcing, tourism, manufacturing, mining and mineral beneficiation etc. R1 million – R75 million

NEF Funding Products in detail

On average, the NEF’s business loans are repayable over 4 to 7 years, and up to 10 years where marked with an asterisk (*) below:

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Market Failures & Non-Financial Support

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Market Failures Facing SMEs

MARKET FAILURES NEF SOLUTIONS Limited own capital Funding of between R250 000 and R75 million for start-up, expansion and equity transformation purposes as well as use of concessionary facilities. Non-descriptive on % of own contribution. Limited management skills, including financial, marketing and technical expertise Entrepreneurship Development tools and dedicated mentorship support. Access to affordable capital Competitive cost of finance with a higher risk appetite as well as requirement for operational involvement (sweat-capital) reduces the need for collateral payment. Lack of accurate and reliable financial information Dedicated pre-investment mentorship support and technical assistance with our partners.

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Market Failures Facing SMEs

MARKET FAILURES NEF SOLUTIONS Poor Quality Business Plans Collaboration with other Government agencies like seda, incubation, entrepreneurial training and general pre- investment support and NEF Online Business Plan-Tool Kit. Lower bargaining and strong competition power from established businesses with entrenched market dominance Linkages and emphasis on the implementation of the codes of good practice (B-BBEE). Wholesale Franchisor Facilities (Engen, Nandos, etc). Lack of access to local and international markets Linkages with off-takers. Relationships with franchisors and corporates for access to markets.

Mentorship

Ongoing mentorship support

• Globally, 30% of start-ups fail in the first 2

years,

• Less than 50% survive beyond 4 years,
• Mentors across the country to help businesses,
• Expert advice on strategy and operations,
• Improve the chances of the business

succeeding,

• Provided for free to NEF investees.

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Post Investment strategic drivers and outcomes

• 1. Ongoing portfolio management
• 2. Regular collections management
• 3. Mentorship and technical assistance
• 4. Active board seats
• 6. Legal Compliance

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Provincial Dynamics

Striving for growth across all provinces

Invested growth across all provinces

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• 1. As a national Development Finance institution

(DFI) the NEF is committed to ensuring that its products and services reach the entire nation.

• 2. As a result, the NEF’s invested presence in

Gauteng has come down from above 60% of total disbursed funds in 2006, to 45% by March 2015.

• 3. This is due to direct consequence of planned,

targeted and increased funding in the other 9 provinces because they are integral to South Africa's economy, comprising 76% of the population.

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Growing Black Industrialists

Creating Black Industrialists

Strategic Industrial Sectors

RENEWABLE ENERGY MINERAL BENEFICIATION AGRO- PROCESSING INFORMATION & COMMUNICATIONS TECHNOLOGY INFRASTRUCTURE TOURISM Biofuels Biomass Biogas Solar Wind Hydro Mining & Mineral Beneficiation Chemicals Agriculture Telecoms Broadcasting Roads Dams and Bridges Sewer and Bulk Services B&Bs Hotels Guest Houses (Women-

• wned)

Real Estate

Together with local & international partners the NEF has developed 20 strategic and industrial projects worth R30bn, with the potential to support over 80 000 jobs.

The NEF’s future equity rights will total R4.2bn at financial close. 14

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Investee Stories

Some of the Franchises Funded to date

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Thank you

Contact Details www.nefcorp.co.za

WHERE TELEPHONE 1 Head Office, Johannesburg 011 305 8000 or 0861843 633 / 0861 THE NEF 2 Eastern Cape 0861 633 327 / 0861 NEF ECP 3 Free State 0861 633 377 / 0861 NEF FSP 4 KwaZulu Natal 0861 633 596 / 0861 NEF KZN 5 Limpopo 0861 633 546 / 0861 NEF LIM 6 Mpumalanga 0861 633 678 / 0861 NEF MPU 7 Western Cape 0861 633 927 / 0861 NEF WCP 8 North West 0861 633 697 / 0861 NEF NWP 9 Northern Cape 0861 633 627 / 0861 NEF NCP