THE NEF PRESENTATION
About the NEF 2
NEF Mandate… Established by the National Empowerment Fund Act No. 105 of 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 only DFI exclusively mandated to grow B-BBEE 3 3
NEF Funds Fund Focus Threshold SME Fund providing R250 000 – Entrepreneurship, 1 iMbewu Fund Procurement & Franchise R10 million Finance Achieve minimum 40% of Women R250 000 – enterprises owned and 2 Empowerment R75 million managed by black women Fund (WEF) Supporting rural economic Rural & development through New R1 million – Community Ventures, Acquisition, 3 Development R50 million Expansion & Greenfields Fund Finance Funding of New Ventures, Acquisition, Project Finance, R2 million – Expansion, Capital Markets, 4 uMnotho Fund R75 million Liquidity & Warehousing Early-stage investment in Strategic Up to R75 industrial / manufacturing 5 Projects Fund million transactions 4
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: Product / Fund Description Funding amounts R250 000 – R10 million 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 For black investors acquiring a stake in medium to R2 million – R75 million Acquisition Finance large companies R250 000 – R75 million Expansion Capital For growing an existing business R5 million – R75 million *New Ventures Finance Participation in green-field projects R2 million – R75 million Capital Markets Listing on the JSE or its junior Altx markets The NEF has Black Facilitator status, which can help R2 million – R75 million Liquidity and Warehousing black shareholders and companies wishing to sell a stake while keeping the shareholding black *Rural and Community Development for agri-processing, tourism, mining & beneficiation, R1 million – R50 million Fund manufacturing etc Venture-capital fund investing in early-stage projects for the purpose of developing strategic industrial R1 million – R75 million *Strategic Projects Fund capacity in poverty nodes, in renewable energy, business process outsourcing, tourism, manufacturing, mining and mineral beneficiation etc. 9
Market Failures & Non-Financial Support 6
Market Failures Facing SMEs MARKET FAILURES NEF SOLUTIONS Funding of between R250 000 and R75 million for Limited own capital start-up, expansion and equity transformation purposes as well as use of concessionary facilities. Non-descriptive on % of own contribution. Limited management skills, Entrepreneurship Development tools and including financial, dedicated mentorship support. marketing and technical expertise Competitive cost of finance with a higher risk appetite as well as requirement for operational Access to affordable capital involvement (sweat-capital) reduces the need for collateral payment. Lack of accurate and Dedicated pre-investment mentorship support and reliable financial information technical assistance with our partners. 7
Market Failures Facing SMEs MARKET FAILURES NEF SOLUTIONS Collaboration with other Government agencies like seda , incubation, Poor Quality Business Plans entrepreneurial training and general pre- investment support and NEF Online Business Plan-Tool Kit. Lower bargaining and strong Linkages and emphasis on the competition power from implementation of the codes of good established businesses with practice (B-BBEE). entrenched market dominance Wholesale Franchisor Facilities (Engen, Nandos, etc). Linkages with off-takers. Relationships with Lack of access to local and franchisors and corporates for access to international markets markets. 8
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. 9
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 10
Provincial Dynamics Striving for growth across all provinces 11
Invested growth across all provinces 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 . 12
Growing Black Industrialists 13
Creating Black Industrialists 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. Strategic Industrial Sectors INFORMATION & RENEWABLE MINERAL AGRO- COMMUNICATIONS INFRASTRUCTURE TOURISM ENERGY BENEFICIATION PROCESSING TECHNOLOGY B&Bs Biofuels Roads Hotels Biomass Mining & Telecoms Dams and Bridges Guest Biogas Mineral Chemicals Broadcasting Sewer and Bulk Houses Solar Beneficiation Agriculture Services (Women- Wind owned) Hydro Real Estate 14
Investee Stories Some of the Franchises Funded to date 15 15 15
Thank you Contact Details WHERE TELEPHONE 1 Head Office, 011 305 8000 or 0861843 633 / Johannesburg 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 www.nefcorp.co.za 16
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