NATIONAL EMPOWERMENT FUND - tikzn.co.za presentations/Monday/NEF - COVI… · • NEF application...
Transcript of NATIONAL EMPOWERMENT FUND - tikzn.co.za presentations/Monday/NEF - COVI… · • NEF application...
NATIONAL EMPOWERMENT FUND
Presented by Mr Phakamile Madonsela Regional Manager: KZN
History of Organization
▪ Established through the National Empowerment
Fund Act No 105 of 1998
▪ Government Agency under the Department of Trade
Industry and Competition (dtic) exclusively
mandated to grow BBBEE
▪ Capitalised by government in 2005 with R2.4billion
▪ Is represented in All 9 Provinces (Gauteng, KZN,
EC, MP, NW, LP, WC, FS, NC)
▪ Large SME Funder in South Africa with more than
R10.1 billion worth of assets under management
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NEF Mandate…
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……..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
one of 4 DFIs exclusively mandated to
grow B-BBEE
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COVID-19 BLACK BUSINESS
FUNDING SOLUTION
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COVID-19 Black Business Fund
Background
• South Africa still needs vast quantities of Medical Supplies and Personal
Protective Equipment (PPE) for the country in particular the health sector
to deal with the expected load of COVID-19 cases.
• It is estimated that the country has 4 weeks’ worth of stock left for frontline
medical staff and other essential health workers.
• While the subsiding coronavirus crisis in China has freed up some of its
capacity to export, some 180 countries are all currently competing for the
same products.
• This has necessitated the South African Government and Its Agencies to
support local manufacturing to secure diminished stocks.
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COVID-19 Black Business Fund
Funding Solution
• The Department of Trade, Industry and Competition (dtic) in partnership
with the National Empowerment Fund (NEF) call upon Black-Owned-
and- Controlled Businesses to come forward for funding geared at
supporting the manufacture and supply of various Medical Supplies and
Personal Protective Equipment
• R200 million has been set aside to be administered by the NEF under the
COVID-19 Black Business Funding Solution as a blended facility for
SMEs that manufacture and supply Identified Priority Products to
access concessionary loan funding.
• By supporting Black-Owned-and-Controlled businesses through the
COVID-19 Black Business Fund, the NEF is helping to fight the pandemic
while taking sustainable economic transformation forward,
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COVID-19 Black Business Fund
Funding Solution
.
Salient Features of the Fund:
• Limited to R10 million per applicant for working capital,
machinery and equipment soft loan funding;
• Up to 12 months payment moratorium at 0% fixed interest
rate;
• After 12 months a fixed interest rate of 2,5% will apply;
• Maximum term is 60 months, including moratorium, and
• First drawdown must occur within 1 month from approval
date.
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COVID-19 Black Business Fund
Funding Criteria
• Have greater than fifty percent (>50%) Black shareholding and
management control. Must be directly involved in the day-to-day running
of the operation and must have requisite expertise and experience in the
sector. Owned by Black South Africans as defined by the Broad- Based
Black Economic Empowerment (B-BBEE) Act.
• In line with the NEF’s transformation mandate, preference will be given to
applications that demonstrate meaningful black women ownership,
management and control.
• Have a project with a minimum of R500 000 and maximum R10 000 000
requirement in working capital, machinery and equipment.
• Must result in retaining or increasing direct jobs.
• Submission of all relevant documents for commercially viable applications.
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COVID-19 Black Business Fund
Funding Criteria
• Be a registered legal entity in South Africa in terms of the Companies Act,
2008 (as amended); the Close Corporations Act, 1984 or the Co-
operatives Act, 2005.
• Be a taxpayer in good standing with a valid tax clearance certificate at
assessment as well as before the loan is disbursed.
• Be a current and registered supplier with retailers and other institutions in
good standing and/or have a purchase order/ contract/ letter of intent.
• Require Working Capital or funds to purchase Machinery and Equipment.
• The fund WILL NOT service any pre-existing debt or help settle monies
owed.
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COVID-19 Black Business Fund
Key Documents• NEF application form (accessible on NEF website: www.nefcorp.co.za).
• Company Registration, Tax Compliance and FICA Documents
• Declaration on BEE status and size of business.
• Summary of production in the last 3 months.
• Copy of the historical financial statements (up to 3 years if any), latest
Management Accounts and/or Financial Projections and Assumptions
• Signed copy of the contract, purchase order, letter of intent or letter of
confirmation of retailer/wholesaler listing from the applicant’s client/s.
• Industry Body Accreditation of Products
• Additional information that would be necessary to enhance application
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COVID-19 Black Business Fund
Products Supported
• Medical Gloves
• Approved Cloth and Polypropylene Face Masks
• Sanitizers and Soaps
• Disinfectants and Alcohol Based Wipes
• Corona Virus Test Kits,
• Medical Protective Clothing
• Hospital Linen and Clothing
• Detergents and Cleaning Products,
• Disposable Aprons and Cups
• Dispensers (Water, Sanitizers and Soap)
• Mattresses and Sponges
• Steel Hospital Beds
• Protective Respirators
• Toilet Paper
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V-Care Medi
• Start-Up Distribution Company
• 100% Black-Youth-Owned
company with 50% black female
youth and 50% black male youth
participation
• Obtained order to supply 100
000 three-ply masks against
which company has an
irrevocable letter of guarantee of
R1.04 million from Impulse Care
Pharmacy, which is an existing
customer of V Care.
• on the successful completion of
this specific order, The client has
confirmed, consistent orders of
300 000 masks per month, even
post-Covid-19, from company
• 3 jobs maintained and 2 Jobs
Created
R950 500 Supply 3-Ply Masks
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Green Logik
• Existing Business with 6 tears
experience in the Chemical
Industry
• Business is 100% Black-Owned
by Dawn and Barry
• Specialises in the production of
hand sanitizers which contain
essential oils such as lime,
lavender, spearmint, citronella,
tea tree and lime.
• The product is sold locally to
retailers, corporates and individual
clients.
• Received order of R5 million from
Pick n Pay for the supply of hand
sanitizers.
• Funding Required for additional
sachets and filling machines to
package units.
• 27 Jobs Maintained.
R6.1million to produce Hand Sanitizers
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Afro-Zonke Chemicals
• Existing Business with 8years
experience in Chemical sector
• 100% Black-Owned-and Manged by
Mr Sthembiso Mkhize
• In 2019 the company won the Black
Industrialist of the year from 6th
Annual South African and Brand SA
KwaZulu Natal Investor Awards
• It specializes in the manufacture of
numerous industrial and household
chemical products
• Has existing contracts and orders in
excess of R50 million for
Disinfectants and Detergents.
• Obtained over R5million Orders for
Hand Sanitisers
• Required Equipment and Raw
Materials to extend its operations to
hand sanitizers,
• 14 Jobs Maintained and 8 Jobs
Created
R10million funding to produce hand
sanitisers, detergents and disinfectants
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RISE UNIFORMS
• Existing Business with 5years
experience in clothing Industry
• 00% black woman-owned and
managed business led by Ms Ms
Ntobekhaya Nonxuba
• Specialises in manufacturing of
clothing for a wide range of items
such as corporate uniforms and
school wear.
• Obtained purchase order for the
manufacturing and supply of 7 million
disposable and reusable face masks,
• Funding required towards specialised
equipment and raw materials
• Manufacturing capacity of 55 000 face
masks per day.
• 43 Jobs Maintained and 20 new jobs
created
R10million funding to produce 7 million face masks
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Tara Healthcare
• Excising Business with 4.5years in the
Medical Supplies Industry
• 100% Black-Owned-Business owned
by Nicholas Naidoo
• Specializes in the manufacturing of
medical and surgical supplies
• Opportunity to respond to increased
demand for personal protective
equipment and medical supplies such
as N95 face masks, hand
disinfectants, full bodysuits, isolation
gowns, infrared thermometers and
medical gloves.
• Customers include the Department of
Health, South African Police Services,
Transnet and pharmaceutical
companies
• Required working capital funding to
increase production, expand its
supplies and deal with the demand to
assist the country
• .15 Jobs Maintained
R10million to produce Medical Supplies
▪ Proactive Marketing
▪ Pre-Investment
basic evaluation
▪ Screened Report referred to Funds’ Due Diligence Committees
▪ Up to R5m approved by FM IC
▪ Loan Agreements drafted in-house
▪ Files handed to POIU– Allocated to Post IA
▪ Initial hand over site visit thereafter at least quarterly
▪ Regular risk ratings performed by POIA, minimum once a year.
▪ Mentorship provided
▪ Collection with Finance
▪ Monthly PMC Meetings
▪ Distressed investments transferred to TWR
▪ Investment
team networks
▪ Detailed screening by A’s
▪ DD performed based on nature of deal
▪ Above R5m recommended to EXCO IC
▪ Most equity agreements also drafted in-house
▪Referrals from external stakeholders (e.g. deal originators, business incubation centers & other government agencies
▪ NEF Operating Manual applied
▪ EXCO IC approves up to R15m
▪ Legal compliance by FM IC Management
▪ Walk-in Clients ▪ Final Investment Paper reviewed by FM IC
▪ Credit Risk Assessment Process
▪ Above R15m to R50m approved by Board IC
▪Funds disbursed
▪ Above R50m approved by Board of Trustees
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Deal
OriginationScreening
Due
Diligence
Approval
Stage
Legal
Stage
Post
Investment
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Telephone: 073 687 9962
(031) 301 1960(011) 305-8080
Address: 4th Floor
Grindrod Bank Building
5 Arundel Close
Kingsmead Office Park
Durban
Email: [email protected]@nefcorp.co.za
Web: www.nefcorp.co.za