Development Finance
Several institutions stand ready to help entrepreneurs in KwaZulu-Natal.
The annual eThekwini SMME Fair is an important event on the calendar for small, medium and micro enterprises in KwaZulu-Natal. Begun some years ago as a city initiative to promote the arts and crafts industry, the fair is run by the city of eThekwini’s Business Support and Markets Unit. Absa Bank sponsors the large event that sees more than 500 businesses exhibiting their wares and services, with upwards of 8 000 visitors passing through the exhibition. Tertiary institutions, non-profit organisations and government departments and agencies also participate in the fair, which provides excellent opportunities for networking. The theme of the conference in 2010 is ‘Small business is big business for 2010 and beyond’.
Another project in which Absa is involved, in collaboration with national government, is a national fund for entrepreneurs. This R267-million initiative has a R50-million component for each province, with the provincial disbursal being split between government and the bank. The KwaZulu-Natal Department of Economic Development and Tourism signed an agreement with Absa in early 2010. Entrepreneurs are able to gain access to loans and overdrafts for amounts between R10 000 and R1-million. Good business plans are essential for applicants and businesses that are fully black-owned will be targeted for support.
The provincial government is investigating how it can roll out, across the province, the successful micro-financing project, the Umlazi Community Investment Fund. The fund, which is run in partnership with Standard Bank, has done a lot to help local traders expand their businesses. The aim is to create such a fund in every district.
Tradepoint South Africa is a trade facilitation centre enabling SMMEs to gain access to international markets. Tradepoint is a concept of UNCTAD, the trade and development arm of the United Nations.
The Durban University of Technology is part of a consortium, comprising four South African institutions and two British universities, which runs the Technical and Business Educational Initiative in South Africa (Tabeisa Enterprise) offering advice and research support to entrepreneurs.
Provincial Development Finance Institutions (DFIs)
- KZN Growth Fund
The KZN Growth Fund concentrates on financing infrastructure projects in the R30-million to R80-million bracket.
- Ithala Development Finance Corporation
Ithala Development Finance Corporation is the finance agency of the provincial government. Through various subsidiaries such as Ithala Business Support and Ithala Properties, the corporation aims to increase black participation in the mainstream economy, to diversify the provincial economy and to create jobs.
National DFIs
- Development Bank of Southern Africa
The Development Bank of Southern Africa (DBSA) has approved loans of more than R30-billion since its inception in 1983. The focus of the bank is infrastructural development. To the end of March 2009, the DBSA disbursed R9.3-billion in loans and equity investments, a 51% increase over the previous year. The bank has plans to expand its book by R100-billion in the period 2009-2014.
- Industrial Development Corporation
The Industrial Development Corporation (IDC) provides finance across a range of sectors from agriculture to tourism. The IDC has holdings in several companies with a presence in KwaZulu-Natal: 42.6% in Hans Merensky (Pty) Ltd, a plantation and timber mill operator; 100% in Prilla 2000, a cotton milling operation; and 85% in Foskor, which has a phosphoric acid plant in Richards Bay. The IDC also funds local development agencies such as the Hibiscus Coast Development Agency.
- Khula Enterpise Finance Ltd
Khula Enterpise Finance Ltd is a financing agency of the Department of Trade and Industry. It aims to fill the gaps not addressed by commercial financial institutions. Khula will lend about R3-billion to SMMEs between 2009 and 2013 via a subsidiary called Khula Direct.
- Land Bank
The Land and Agricultural Development Bank of South Africa (Land Bank) offers financing to established farmers and emerging farmers. It has main offices in Vryheid and Pietermaritzburg and four satellite offices.
- National Empowerment Fund
The National Empowerment Fund (NEF) is an agency of the national Department of Trade and Industry, which is geared towards promoting broad-based black economic empowerment (BBBEE). A new initiative in 2009 saw the launch of an online business planner in five languages. Small businesses often have trouble developing business plans so this tool will help budding entrepreneurs in planning and presentation. A nine-step process includes cash flow projections, managing financial statements, capital expenditure and balance sheets.
- National Youth Development Agency (NYDA)
This entity was launched on Youth Day, 2009. As a statutory body, the NYDA will be closely monitored in the way that it disburses its allocation of R1-billion during a three-year mandate. The NYDA’s regional head office is in Durban and there are 13 Youth Advisory Centres scattered around the province.
