BPDM Cooperative Summit

Transcription

1 BPDM Cooperative Summit

2 Introduction and Background sefa was established on 1 st April 2012 Merger of South African Micro Apex Fund (samaf), Khula Enterprise Finance Limited and the small business activities of IDC Established as a subsidiary of the IDC under the IDC Act Mandate: provide access to finance for survivalist, micro, small and medium businesses throughout South Africa Addresses triple challenges of job creation, poverty and inequality through enterprise development sefa executes its mission through a hybrid of wholesale and retail lending products and services Supports start-ups, expansion and acquisition of existing small business Development Financial Institution with a higher appetite for risk do not compete with commercial lenders 2

3 Vision To be the leading catalyst for the development of sustainable Survivalist, Micro, Small and Medium enterprises through the provision of finance 3

4 Mission Development of SMMEs throughout South Africa by: Providing finance to SMMEs on a wholesale and direct basis Providing business support services and capacity building Creating strategic partnerships for sustainable SMME development and support Monitoring the effectiveness and impact of finance provision and capacity development in the SMME sector 4

5 Values okuya sheshwa! - Speed and urgency: opassion for development: Solution-driven attitude, commitment to serve ointegrity: Dealing with clients and stakeholders in an honest and ethical manner otransparency: Ensuring compliance with best practice on the dissemination and sharing of information with all stakeholders oinnovation: Continuously looking at new and better ways to serve our customers 5

6 Overall Strategic Objectives o Increase access and provision of finance to small businesses and thereby contribute towards job creation o Develop and implement a national footprint for effective product and service delivery o Build an effective and efficient sefa that is a sustainable performance driven organisation o o Build a learning organisation Build a sefa that meets all legislative, regulatory and good governance requirements (compliance) o Build a strong and effective sefa brand emphasizing accessibility to SMMEs 6

7 Target Market o Survivalist, Micro, Small and Medium size businesses and Co-Operatives - As defined in the National Small Business Act of 1996 and Co-Operatives Banks Act 2007 as amended o Special emphasis on the following sectors: Services (including retailing, wholesaling and tourism) Manufacturing (beneficiation) Agriculture (specifically land reform beneficiaries and micro-farming activities) Construction (small construction contractors) Mining (specifically small miners) o Targeted Group (Priority) 30% youth-owned enterprises. 45% priority rural provinces. 40% women-owned businesses. 70% black-owned businesses. 7

8 Target Market (cont ) Opportunity-driven/ Entrepreneurial Medium enterprises Small Enterprises Very Small Enterprises Necessity-driven/ Survival Micro Enterprises Segment Survivalists and Microenterprises Small and Medium Enterprises Joint-Ventures and Financial Institutions (Wholesale Lending) R500 - R50k R50k - R5m R20m R100m Thresholds 8

9 Delivery Model DIRECT LENDING General SME Finance WHOLESALE LENDING SMMEs (Niche Funds) sefa sefa Financial Intermediaries SME s SMME s 9

10 Market Offerings 10

11 Direct Lending Product Bridging Loans Description For businesses which do not have sufficient capital to fulfill their tenders or orders. The loan duration is maximum 12 months Revolving Credit Asset Finance Term Loans Working Capital This advance is available to established sefa s clients with satisfactory credit records to facilitate short-term capital requirements for the delivery of existing customer contracts or orders Provision of finance for the acquisition of a fixed assets for use in the operation or expansion of the business, with each advance repayable monthly on an amortized basis including interest. The loan duration is for the economic useful life of the asset, not exceeding 60 months This is an advance with a fixed tenure of between 1 and 5 years. The advance is generally amortized in equal monthly (or quarterly) installments of principal and interest over the life of the term loan. The purpose of the loan is to finance longer term working capital requirements, specific capital acquisition and/or business expansion projects. The loan duration is a minimum of 12 months, a maximum of 60 months. This is an advance to facilitate short term working capital requirements for the procurement of goods and/or services to fulfill existing customer contracts or orders. This loan duration is a maximum of 12 months 11

12 Wholesale Lending Product Business Loans Specialised Funds/ Joint Ventures Credit Guarantee Scheme Land Reform Empowerment Fund (LREF) Description Partnership with Non Bank Financial Intermediaries for on-lending to SMMEs (e.g. sefa provides loan to SEF, who lends money to micro enterprises) Partnership with mainly private sector entities for on-lending to SMMEs (e.g. sefa s partnership with Anglo to provide finance to small mining contractors) sefa provides guarantees to banks, enabling loans to small businesses that do not otherwise have sufficient collateral/security to support facilities Facility through which sefa lends money to commercial banks and other reputable agricultural lenders for on-lending to land reform beneficiaries 12

13 Business Support Services Service Post-Loan Business Support Institutional Capacity Building Description This service is only provided to SMMEs that have benefitted from facilities provided by sefa and its financing partners as a risk mitigating intervention (e.g. sefa provides a mentor to a small business to assist with specific aspects of running the business) Aimed at providing institutional strengthening and technical assistance to Financial Intermediaries (e.g. funding provided to an intermediary to assist it in improving its systems) 13

14 Eligibility Criteria Applicants must be South African citizens, with valid South African Identity Documents or legal entities controlled by South African Citizens Be legally constituted including sole traders with a fixed physical address The financed operations must be conducted within the borders of South Africa If sefa finances transactions that take place outside its borders or of an export nature sefa must be satisfied that the proceeds will be remitted to RSA The Enterprise(s) must be compliant with relevant generally accepted corporate governance practices appropriate to the client s legal status Labour Laws (Conditions of Employment, Employment Equity, etc.) Taxation (PAYE, VAT, Income Tax, etc.) By-Laws Ability to create new jobs as well as the desired level of development impact 14

15 Eligibility Criteria (Wholesale) It should have a national or provincial reach The business model should be sustainable The company should have a strong SMME focus The business must have a clearly defined target market in line with sefa s strategic objectives It should have a developmental agenda, with a bias towards women, youth and rural development It must be compliant with generally accepted corporate practices It must have a business plan that meets the basic criteria set out in sefa s business plan guidelines 15

16 Exclusions Shareholder initiated exclusions, or business whose trade or operations may prejudice the reputation and good standing of sefa Speculative real estate Speculative trading and hedging for the Institution s own position; Political parties or organisations Listed companies; Loans to refinance existing debts People under debt review, or unrehabilitated insolvents, as well as entities under business rescue or liquidation Business relationships and transactions with entities and individuals that contravene the following legislation: The Prevention of Organised Crime Act No. 121 of 1998 (POCA); The Financial Intelligence Centre Act 38 of 2001 (FICA); and The Protection of Constitutional Democracy against Terrorist and Related Activities Act No 33 of 2004 (POCDATARA) 16

17 Exclusions (cont ) Entities/individuals whose primary business involves arms related transactions Religious entities and other activities which could cause a moral dilemma for sefa; Companies involved with child labour; Transactions that do not contribute positively to development impact or ventures inconsistent with the mandate of sefa; Companies whose primary business involves gaming and gambling, or morally harmful industries tobacco, liquor, sex trade; Business relationships/transactions that transgress tax, accounting, regulatory requirements as well as societal norms and environmental legislation Primary Agriculture, except for cash crops; Entities where sefa employee or board member has a financial interest Individuals and entities listed on the IDC Delinquency register Immediate family members of a sefa employee or a Board member, which includes life partners, parents and children 17

18 What makes sefa different Provision of capital and/or interest moratorium (Payment Holiday) up to 12 Months High appetite for risk in exchange for high development impact Financing SMMEs including start up businesses that are often perceived as high risk Addressing the financing gap for loans below R500k Distinct focus on businesses operating within South Africa by South Africans Provision of pre and post loan business support Provision of funding to entrepreneurs with adverse credit records provided they can demonstrate active remedy of their indebtedness Lending not solely based on security backing long term sustainability potential Specific focus on youth and women owned businesses 18

19 Application Documents (Pack) Application forms Surety form(s) - if applicable Certified copies of identity documents of all affected individuals Marriage certificate (if applicable) Short CV of the key personnel Proof of residence utility bill/sworn affidavit (not older than 3 months) Valid tax clearance certificate Valid company registration documents with CIPC Company profile Company s financial statement (audited and unaudited) where applicable 6 months latest bank statement (personal and business) Purchase order Loan utilization breakdown Supporting quotation(s) on supplier(s) letterhead(s) Personal income and expenditure schedule Personal assets and liabilities statement Proof of own contribution and source (if application) If a judgment, notice, default is issued against the applicant, a letter or document to prove that arrangement are made to settle the account or proof that the amount is settled must be provided. 19

20 Five Year Forecast Measure 2013/ / / / /18 Approvals R815.0m R m R m R m R m Disbursements R737.5m R955.3m R m R m R m Jobs SMMEs

21 Strategic Partnerships (MOUs) Business Plan Development Colocation Bookkeeping and Secretarial Services Incubation Business Plan Development 21

22 Strategic Partnerships (MOUs) cont Basic Assessment Project Management (Construction Sector) Business Support SMME Financing

23 Strategic Partnerships (MOUs) cont Basic Assessment Colocation Basic Assessment SME Forums 23

24 Delivery Network Province Regional Office Telephone Eastern Cape East London (043) Port Elizabeth (041) /74 Free State Bloemfontein Gauteng Johannesburg KwaZulu Natal Durban Limpopo Polokwane Mpumalanga Nelspruit Northern Cape Kimberley North West Rustenburg Western Cape Cape Town Head Office National Call Centre

25 sefa Online Enquiry \ Application Home Screen

26 Discussion THANK YOU 27