KZN JOINT SMME RISK
FUND
C M DUBE
PRESENTATION OUTLINE
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Background
Access to Finance How?
Stakeholders
Business Support
Funding
Criteria
Other Stakeholders
How to Access the Fund
1.BACKGROUND
The Fund is an initiative of the Department
of Economic Development and Tourism in
response to:
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Improving access to finance
Promoting BEE
Developing a sustainable economy
Local economic development
Sector development
Enhancement of the provincial supply chain mechanism
Encouraging more bank participation in SMME funding
2. Access to Finance How?
The Fund is a credit guarantee which
includes:
• Risk sharing (with funders) resulting
in competitive:
Own contribution
Security/ Collateral( in case of default, both
parties share risk on a 50:50 basis)
Interest rate
3.STAKEHOLDERS
To facilitate access to funding which is not easily attainable from
normal banking processes, the department concluded separate
funding agreements with:
 Ithala
 Standard Bank (SBSA)
 ABSA
4. SUPPORT
The loan process through this fund includes
partnerships and assistance towards:
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Business proposal Assessment
Bankability of Business Plans
Presentation to Banks
Pre and post finance mentorship and
support or workshops
5. LOAN RANGES
 ABSA
Loans from R10 000 to R 3million
 STANDARD BANK
Loans from R100 000 to R3million
 ITHALA
Loans up to R15million
6.FUNDING
Qualifying Businesses
 New businesses and
 Expanding viable businesses.
Allocation of funds
 Working Capital/ Bridging finance
 Start-up Capital
 Asset Finance
7.CRITERIA
• Applicants must be BEE, historically
disadvantaged backgrounds.
• The business must be for a profit motive and
economically viable.
• The main business operations or primary place of
business must be in KZN.
• The owner/s who hold controlling interest must run
the business on a day-to-day basis.
8.Criteria cont.
 Existing business
 demonstrate proven viability through
audited or certified financial statements
and/or management accounts.
• Start-up
 demonstrate potential viability through a
detailed Business Plan with a 12 months
cash flow projection.
• Own contribution-depending on the nature/
complexity of the funding required.
• Adverse Credit listings - disclose upfront
9.OTHER STAKEHOLDERS
• SEDA
For other business support and service
provision
• District and local Municipalities
To ensure spread and depth of the fund
• Business Community
For their benefit and spread
10.ACCESSING THE FUND
Contact /Approach
Department of Economic Development
 Head Office
 District Managers
Banks- some are centralised
 Ithala
 SBSA
 ABSA
Conclusion
The SMME FUND as a sub programme
of KZN Small Business Development
Programme is aimed at contributing
to the Strategic Goals and Outcomes
of the Government.
THANK YOU
Contacts:
Muntu Dube
[email protected])
or Jabu Mngoma
[email protected])
270 Jabu Ndlovu Street Pietermaritzburg
033 264 2500
www.kznded.gov.za)
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Kzn Joint Smme Risk Fund - KZN Economic Development & Tourism