Sefa Presentation to the Portfolio Committee on Small Business Development
Thakhani Makhuvha
Chief Executive Officer
Parliament
Cape Town
03 September 2014
Contents
•About us–Mandate / Vision
–Mission
–Values
–Product offerings
•Legislative and policy framework
•Strategic Objectives
•Model of operation
•Footprint
•Developmental impact
Our vision
To be the leading catalyst for the development of
sustainable SMMEs through the provision of
finance.
Our mission
Our mission is to provide simple access to finance in an
efficient and sustainable manner to SMMEs throughout South
Africa by:
• delivering Wholesale and Direct Lending credit facilities or
products;
• providing credit guarantees to SMMEs;
• supporting the institutional strengthening of Financial
Intermediaries so that they can effectively assist SMMEs;
• creating strategic partnerships with a range of institutions
for sustainable SMME development and support;
• monitoring the effectiveness and impact of our financing,
credit guarantee and capacity development activities; and
• developing (through partnerships) innovative finance
products, tools and channels to speed up increased market
participation in the provision of affordable finance.
Our values
• kuyasheshwa! We act with speed and urgency;
• passion for development: Solution-driven
attitude, commitment to serve;
• integrity: Dealing with clients and stakeholders in
an honest and ethical manner;
• transparency: Ensuring compliance with best
practice on the dissemination and sharing of
information with all stakeholders and
• innovation: Continuously looking for new and
better ways to serve our clients.
Portfolio of products
Our Direct Lending channel
offers the following products:
• Working Capital Facilities
• Asset Finance
• Term Loans
• Revolving Loans
• Bridging Loans
• Short-term Trade Finance.
The Institutional Support
offers the following:
• Institutional Strengthening
• Technical Support
• Rental Property( Industrial
and commercial)
Through our Wholesale
Lending channel, we offer
these financial products:
• Business Loans – (RFIs,
Joint Venture Funds)
• Microfinance;
• Financing of Co-operatively
owned enterprises
• Credit Guarantee Scheme;
• Land Reform Empowerment
Fund.
Legislative and policy framework
sefa strives to conform and adhere to all regulatory and statutory requirements. We have Audit and Compliance Committees whose core functions are to guide sefa through regulatory requirements and/or changes with the intent of preventing the severe non-compliance implications (including but not limited to financial and reputational consequences). Among other legislations, we ensure conformity to the following:
ENABLING
LEGISLATION• The Industrial
Development
Corporation (IDC)
Act
CORPORATE
GOVERNANCE• The Companies Act 71
of 2008 (the Companies
Act)
• Public Finance
Management Act of
1999 (PFMA)
OTHER RELATED & SUPPORTING LEGISLATION• Broad-Based Black Economic Empowerment Amendment Act, 2013 (Act No. 53 of 2003); and Codes of Good Practice
• National Small Business Act, No 102 of 1996
LENDING
LEGISLATION• National Credit Act (NCA)
• Short Term Insurance Act,
53 of 1998 (STIA)
• Co-operatives
Amendment Act No 6 of
2013
• Financial Intelligence Act
Strategic objectives
1. Increase access and
provision of finance to
SMME’s and thereby
contribute towards job
creation
2: Develop and
implement a
national footprint
for effective
product and service
delivery 3. Build an effective
and efficient sefa
that is a sustainable
performance driven
organisation
4. Build a learning
organisation
5. Build a sefa that
meets all legislative,
regulatory and good
governance
requirements 6. Build a strong and
effective sefa brand
emphasizing
accessibility to
SMMEs
Model of operation
sefa Direct
Lending
sefa
Wholesale
Lending
sefa Funding Model
SMMEs can access sefa funding solutions through any of the above channels
Credit
Guarantee
Schemes
Finance Intermediaries:
(CFIs, MFIs, Joint
Ventures & Funds, Retail
Finance Intermediaries)
R50k to R5m Up to R5m R500 to R5m
Formal registered
financial institutionssefa regional offices and
seda co-locations
Our footprint
Developmental impact
BREAKDOWN OF THE 46 407 SMMEs
FUNDED AND THE R822 MILLION
DISBURSED
• 10, 291 were youth owned enterprises with
loan funding support to the value of R157
million;
• 44, 302 were women owned businesses
with funding support to the value of R362
million;
• 36, 729 were rural-based enterprises with a
total funding of R429 million; and
• 43, 643 were black owned enterprises
funded to the value of R599 million.
Youth Businesses Funded in 2013/14
9 65 332 18 9807 60
R 6.2m
R 41.6m
R 7.2mR 9.7m
R 40.5m
R 52m
0
10000000
20000000
30000000
40000000
50000000
60000000
Credit Indemnities Direct Lending CFIs Special Funds MFIs RFIs
Youth businesses funded per Channel
Total Youth Owned Enterprises Amount Funded
Women owned businesses: 2013/14
0
20000000
40000000
60000000
80000000
100000000
120000000
140000000
160000000
180000000
200000000
CreditIndemnities
Direct Lending CFIs Special Funds MFIs RFIs
10 64 696 134 43330 68
R2,5 m
R68,7 m
R11,6 m
R21,9 m
R189,4 m
R68,3 m
Women Owned Initiatives funded per Channel
Total Female Owned Enterprises Amount Funded
Rural areas/Priority Provinces
Total SMMEs in Rural-based (Priority Provinces) Amount Funded
Credit Indemnities 6 R 2 755 653.35
Direct Lending 79 R 101 542 657.10
CFIs 103 R 756 000.00
Special Funds 300 R 89 573 082.82
MFIs 36146 R 139 123 618.52
RFIs 95 R 96 193 271.68
0
20
40
60
80
100
120
140
160
AM
OU
NT
FUN
DED
MIL
LIO
NS
Priority province based SMMEs funded
Black Businesses Funded in 2013/14
Number of Enterprises per Channel
Amount Funded
0
50000000
100000000
150000000
200000000
CreditIndemnities
DirectLending
CFIs SpecialFunds
MFIs RFIs
11 194 1059 310 41991 78
R 9.7m
R 196.4m
R 20.7m
R 83.9m
R 187m
R 101.7m
Black Businesses Funded per Channel
sefa Regional● & Branch Offices ◦
GEOGRAPHIC LOCATION LENDING ACTIVITIES
Regional Office Address
• Application process
• Due diligence
• Management of collateral
• Application of Credit Risk Ratings
• Financing SMMEs including start up
businesses that are often perceived as high risk
• Addressing the financing gap for loans
between
R50 000 and R5m
1. Free State ● Office 4 & 5, Preller Square, Graaf Reinet Street, Dan Pienaar, Bloemfontein
2. Kwa-Zulu Natal●199 Anton Lembede Street
2102 Embassy Building - Durban
3. Gauteng, (South Western) JHB
No. 33 Hoofd Street, Braampark
Forum 1, Ground Floor
Braamfontein, Johannesburg
4. Gauteng, (North Eastern) Tshwane ◦ 4TH Floor, Block C, Old Mutual Building, 536 Schoeman Street, Tshwane.
5. Western Cape – CT ● 2 Long Street, 9th floor, FNB Building, Cape Town
6. Eastern Cape, (Western ◦7. Districts) PE
No. 68 Cape Road, Mill Park
Port Elizabeth. 6000
7. Eastern Cape, (Eastern Districts) EL ●Chesswood Office Park, 8-10 Winkley
Street, 2nd Floor Berea, East London
8. Western Cape, (Western Districts);
Claremont - CT●
1st Floor 200 on Main
Cnr Main and Bowwood Road
Claremont - 7708
9. Northern Cape NC ● 72 Long St, Business Partners Building, Kimberley.
10.Mpumalanga, Nelspruit● Suite No 5, Alcrest Building, Cnr MacAdams & Rothery Streets, Nelspruit.
11. Limpopo ● Suite 4, Biccard Park, 43 Biccard Street, Polokwane.
12.North West, Rustenburg ● 32b Heystek St, Sunetco Building, Rustenburg.
17
Co-operative Financial Institutions
CO-OPERATIVE NAME LOCATION SMME LENDINGFlash/ Sebenza Financial Cooperative Cape Town, Western Cape WHOLESALE LENDING
• On-lending loans: These are loans offered
through Financial Savings Co-operatives to
on-lend to members.
• Capacity-building grants: These are
services offered to Financial Savings Co-
operatives as grants to subsidize operating
costs and acquire assets such as furniture
etc.
DIRECT LENDING
• Business loans: Loans issued to
enterprising co-operatives and are priced as
per direct lending pricing model.
• Mentorship: Mentorship services provided to
co-operatives which received business loans.
R500 up to R5m loans to SMMEs
Kwa-Zulu Natal Financial Cooperative Durban, KwaZulu-Natal
Sibanye Cape Financial Cooperative Bellville, Western Cape
Mankotsana Financial Co-operative Apel, Limpopo
Kuvhanganyani FSC Limpopo
Boikago SACCO North West
Ditsobotla Primary Co-op Bank North West
Mutapa Financial Cooperative Limpopo
Mmetlakhola FC Gauteng
Tlharihani SACCO Limpopo
♦
Financial Savings
Co-operatives
MFI NAME PROVINCE SMME LENDING
Akanani Finance Co Limpopo
SMMEs can access funding from R500 up
to R50 000 from these Micro Finance
Intermediaries
Aloga financial services Gauteng
Get Ready Investment Holdings Limpopo
Ikusasa Empowerment Trust North West
Opportunity Finance KZN
Phakamani Foundation Mpumalanga,
Sakthi Financial Services KZN
Small Enterprise Foundation Limpopo
Tetla Development Services WC
Moliko Trust Free State
Tiisha Enterprise Finance Limpopo
Extra Credit Trading Eastern Cape
G50 Women financial services Limpopo
Kuyasa Fund Western Cape
Mazwe Financial Services Gauteng
Ndiza Finance Gauteng
Micro-finance Intermediaries▲
Retail Finance Intermediaries▪
RFI NAME LOCATION FUNDING FACILITIES
Capital Harvest Emerging Farmer
Finance
Stellenbosch, Western
Cape
SMME loans
between R500 up to
R50 000
Retmil Financial Services (Pty) Ltd Westdene, Bloemfontein,
Free State
Mettle Administrative Services (Pty) Ltd Bellville, Western Cape
Cape Capital Investment & Finance Co
Ltd
Newlands, Wester Cape
CapX Invoice Discounting (Pty) Ltd Durbanville, Western Cape
Droogfontein Incubation Farm Midrand, Gauteng
Partnerships∞
PARTNERSHIP
NAME
LOCATION OBJECTIVES
Tourism Enterprise
Partner (TEP)
Johannesburg,
Gauteng
To boost and sustain
SMMEs in the tourism
sector
sefa/ Tongaat Hulett
Sugar (THS) Facility
– R50 000 000.
Tongaat,
KwaZulu Natal
To fund sugar-cane
small scale farmers in
KZN
sefa/BAW Facility Johannesburg,
Gauteng
Taxi business funding
Land Reform
Empowerment
Facility
National Support to Land
Reform Beneficiaries
FUND NAME LOCATION BENEFICIARIES
Godisa Supplier Development Fund Johannesburg, Gauteng Offers SMMES Business Loans of up R5m
Anglo American sefa Mining Fund Johannesburg, Gauteng Designed to aid small and medium sized
black empowerment businesses that are
involved in small scale mining and related
activities within the Republic of South
Africa.
sefa Awethu Youth Fund Johannesburg, Gauteng For young township entrepreneurs in
Gauteng
Identity Development Fund Johannesburg, Gauteng For black-women owned entities
Khula–Akwandze Fund Johannesburg, Gauteng Agricultural funding
UTHO Capital Infrastructure SME Fund Johannesburg, Gauteng Equity funding
Business Partners Khula Start- Up Fund Durban, KwaZulu-Natal Business Start-up funding
Enablis Khula Loan Fund and Khula Enablis
Acceleration FundJohannesburg, Gauteng Technological funding
Specialised Funds*
THANK YOU