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KZN JOINT SMME RISK FUND

KZN JOINT SMME RISK FUND. C M DUBE . PRESENTATION OUTLINE. Background Access to Finance How? Stakeholders Business Support Funding Criteria Other Stakeholders How to Access the Fund. 1.BACKGROUND.

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KZN JOINT SMME RISK FUND

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  1. KZN JOINT SMME RISK FUND C M DUBE

  2. PRESENTATION OUTLINE • Background • Access to Finance How? • Stakeholders • Business Support • Funding • Criteria • Other Stakeholders • How to Access the Fund

  3. 1.BACKGROUND The Fund is an initiative of the Department of Economic Development and Tourism in response to: • 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

  4. 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

  5. 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

  6. 4. SUPPORT The loan process through this fund includes partnerships and assistance towards: • Business proposal Assessment • Bankability of Business Plans • Presentation to Banks • Pre and post finance mentorship and support or workshops

  7. 5. LOAN RANGES • ABSA Loans from R10 000 to R 3million • STANDARD BANK Loans from R100 000 to R3million • ITHALA Loans up to R15million

  8. 6.FUNDING Qualifying Businesses • New businesses and • Expanding viable businesses. Allocation of funds • Working Capital/ Bridging finance • Start-up Capital • Asset Finance

  9. 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.

  10. 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

  11. 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

  12. 10.ACCESSING THE FUND Contact /Approach • Department of Economic Development • Head Office • District Managers • Banks- some are centralised • Ithala • SBSA • ABSA

  13. 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.

  14. THANK YOUContacts:Muntu Dube dubem@kznded.gov.za)or Jabu Mngoma mngomab@kznded.gov.za)270 Jabu Ndlovu Street Pietermaritzburg033 264 2500www.kznded.gov.za)

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