As Women's Month draws to a close, Meryl Mamathuba of the IDC doesn't have the luxury of reflecting on the events of the past four weeks.
Speeches and events hat have celebrated the contribution of women to South Africa. Mamathuba is head of the IDC's development funds, which includes the Women Entrepreneurial Fund (WEF). This fund was established in 2008 with R300-million to encourage greater participation by women in the economy. Ironically, her biggest challenge is finding women-owned businesses to take advantage of the preferential terms available.
The fund has an expiry date of 2015, but has thus far only managed to approve loans valued at R60-million, which she finds bemusing in the current economy. "We would have liked to do a lot better, but we struggle to find businesses that qualify under the fund, probably because the IDC mandate and the profile of current womenowned business are not aligned," says Mamathuba. This mandate sits squarely in productive and manufacturingrelated industries that are expected to contribute to significant job creation and economic development. The IDC is already active in industries such as chemicals, paper and pulp, textiles, metals, fabrication, mining and agroprocessing. Services sectors that are ideal targets for IDC intervention include media and motion pictures, information and communication technology, tourism and health.
The terms to qualify for a WEF loan therefore exclude many smaller enterprises because they don't meet the minimum funding level of R2-million. Mamathuba says the IDC understands its role is not only to support women-owned enterprises in such sectors, but also to develop those industries themselves to pave the way for women to realise the economic opportunities the sectors present. "The reason we came up with a fund like this with very strict investment guidelines was because we want women to start participating in those male-dominated sectors.
In order for us to do that, we have to develop those markets for women, because they are currently under-developed. "The IDC acknowledges that doing development is not easy, so we might have had an ideal picture when we started off, but we have to tweak that as time goes on," she says. She therefore does not believe that either her team's efforts or the funding will be squandered should they not see a significant uptake in applications and approvals by the time the WEF expires.
"It's not a time frame we're after; the ultimate goal is seeing women participate in those sectors," she says. The R60-million the fund has approved thus far has been made available to 16 enterprises, seven of which are in the chemicals industry. Mamathuba says it is an encouraging sign that there are businesses that qualify in some of the chosen sectors. The 16 beneficiaries, which are subject to confidentiality clauses and therefore cannot all be named, are predominantly in Gauteng and the Western Cape, although not restricted to these two economic hubs.
As mentioned, most are in the chemicals sector, but women-owned businesses in the transport, wood, agroprocessing, metals, textiles, technology and health sectors have also qualified for loans. "We have received applications relating to the tourism sector, butagain the challenge is the IDC mandate and loan thresholds. So if we do fund a women-owned enterprise in the tourism sector, it would have to be a development project that falls within the IDC mandate," says Mamathuba.
Apart from supporting existing or greenfields women-owned operations, the WEF team has also partnered with the department of trade and industry's Isivande Fund, which encourages the conversion of enterprises from the informal to the formal sector. Similarly, partnerships have been formed with other departments, such as the department of women, children and people with disabilities, to identify enterprises or entrepreneurs who could benefit from the funding available through the IDC's development funds.
Entrepreneurs in the rural areas fall within this scope, but could also easily qualify for full WEF loans in the agricultural and agroprocessing sectors. Mamathuba says although the scale of these projects may potentially fall below the WEF threshold, this can be addressed by finding or developing markets that would provide the scale needed. "Whether we like it or not, the majority of women-owned or -managed businesses fall into the higher risk category because they were previously marginalised and didn't have access to the necessary skills to run their business properly. "So as part of this funding, we have built in a technical support component in the form or grants or low- or no-interest loans, which would help them address issues such as market access," she says. The issue of risk is one that the IDC is accustomed to and one that Mamathuba says is a reason why women-owned businesses should consider applying to the WEF for funding.