R300m fund awaits applications
Under this fund, R300-million is to be made available to woman-owned enterprises each year until 2015. The other funds under the IDC's development initiative include the Equity Contribution Fund (R150-million), the People with Disabilities Fund (R50-million), the IDC Development Fund for Workers (R350-million) and the IDC Foundation Fund for Communities (R150-million).
The Women Entrepreneurial Fund is accepting applications from businesses with a minimum women shareholding of at least 50%. These businesses would be considered for a 100% loan without the requirement to make a matching contribution. Women-owned business with a shareholding of 25% and 50% may also qualify, although under revised terms. "We would prefer ownership by women to be as high as possible," says Meryl Mamathuba, the IDC's head of development funds.
"And we look at more than just ownership and want to promote the participation of women at management level in these organisations." She adds that the marginalisation of women in the past means there is an experience gap that needs to be filled, but is hopeful that the younger generation will have the basics with which to pursue careers as business owners. "We also have to put together interventions now so that they are economically active and start from a higher base."
Funding is available to start-up businesses or for existing enterprises that wish to expand operations, and therefore contribute to job creation. New operations are expected to have a direct or indirect total net asset base of less than R15-million, and the total asset base of existing enterprises may not exceed R80-million. These prescriptions are intended to spread the loan base and ensure that the funding goes to businesses that still have the ability for strong economic and employment growth. The maximum loan size is capped at R30-million a transaction.
Funding is provided as a loan, but may be provided on an equity or quasi-equity basis, depending on the nature and extent of the project being financed. Mamathuba says she is encouraged by the focus given to women empowerment and entrepreneurship in the National Development Plan unveiled recently by the National Planning Commission.
The plan recognises that women make up a large percentage of the poor, particularly in rural areas, and proposes a range of recommendations, including that the transformation of the economy should involve the active participation and empowerment of women.
"Although progress has been made to improve the lives of women, discrimination, patriarchal attitudes and poor access to quality education persists. The plan deals with these
factors holistically, recognising that key priorities such as education or rural development will have the biggest impact on poor women," the report says.
Mamathuba says this is certainly the right approach and that although the focus should be on developing rural areas, not only women in these areas, it is inevitable to talk about women within that context as they are so pivotal within those communities.
The manufacturing sectors – such as the chemical sector (which is the biggest beneficiary of the fund), and other sectors such as agroprocessing – are considered ideal vehicles
through which the IDC can direct its WEF money, as these are generally sustainable, long-term and the right size to benefit from development financing.