Funding agencies in South Africa play an important role by helping to make previously disadvantaged South Africans business owners.
Indeed, South Africa is a country where the official unemployment rate was around 30% in the second quarter of 2019 (Trading Economies). Even more, Business Tech recently reported that the unemployment rate for young South Africans with a matric was 55% in first quarter of 2019 – rising to 58.4% for those with less than a matric.
The solution for these people is to start their own businesses. And, if they can get funded by the government, even better!
So, for those who qualify – here are some of the most important (government) funding agencies in South Africa:
The IDC does funding across multiple industry sectors:
- Agro-processing & agriculture;
- Chemical products & pharmaceuticals;
- Clothing & textiles;
- Tourism; and many more…
The funding from the IDC starts from R250 000 to R75-million
Isivande Women’s Fund (IWF) is an exclusive fund that aims to accelerate women’s economic empowerment by providing more affordable, usable and responsive finance than is currently available.
Indeed, the IWF targets formally registered, 60% women owned and/or managed enterprises that have been existing and operating for two or more years with a loan range of R30 000 – R2 million.
Land Bank provides financial services to the commercial farming sector and to agri-business and to make available new, appropriately designed financial products that would facilitate access to finance by new entrants to agriculture from historically disadvantaged backgrounds.
Landbank will give you a loan of up to 60% of the value of the farm. In fact, if you are from previous disadvantage group, you can get up to a 90% loan (Agrifarms).
The Small Enterprise Finance Agency (SOC) Limited (SEFA) provides financial products and services to qualifying SMMEs and Co-operatives. SEFA’s core function is to foster the establishment, development and growth of SMMEs and Co-operatives. Furthermore, it contributes towards poverty alleviation, job creation and economic growth.
Sefa offers direct business loans ranging between R50 000 up to R5-milion
The TIA Act established the Technology Innovation Agency with the objective of: “… stimulating and intensifying technological innovation in order to improve economic growth and the quality of life of all South Africans by developing and exploiting technological innovations.”
Indeed, the TIA can fund technology SMEs through their Seed Fund up to R 1 million per project.
Although the funding agencies of South Africa play a crucial role in the empowering of our previously disadvantage citizens, they do not loan the money unconditionally. However, SMEs and prospective business owners that apply for loans at the funding agencies must prepare them for the same vigorous processes that bank requires…
A well researched and written Business Plan helps to get your business started the right way.