Govt's R2bn empowerment fund
1 June 2004
The government on Monday launched the National Empowerment Fund with an initial capital injection of R2-billion.
Trade and Industry Minister Mandisi Mpahlwa said the fund was ready and waiting to open its doors for business from Tuesday.
The fund was established by the National Empowerment Fund Act in 1998 to promote and facilitate economic equality and transformation.
NEF chief executive Sydney Maree said the fund will play a catalyst role both for non-profit organisations and profit-making enterprises as long as they assisted in economic transformation and created sustainable job opportunities.
The NEF has three products - generator, accelerator and transformer. Generator aims to help black entities with investment ranging from R250 000 to R1-million, the accelerator product's investment ranges from R1-million to R3-million, while the transformer ranges from R3-million to R10-million. In certain instances this limit may rise to
R20-million.
Mpahlwa said the NEF's goal of sustainable empowerment and transformation will be achieved by promoting and supporting business ventures pioneered and run by historically disadvantaged South Africans.
"The fund will do this by promoting a culture of savings and investment, and by fostering a broader understanding of equity ownership. In this way the NEF, on behalf of government, seeks to redress the inequalities of the past, and promote a competitive and efficient economy capable of generating job opportunities in volume."
The minister urged black economic empowerment firms to use the opportunities created by the NEF.
"The products of the fund will include financing for new entrepreneurs, business expansion, and BEE transformation of existing businesses, as well as financing for empowerment in listed companies and for large projects," Mpahlwa said.
He added that unless the country moved quickly to remedy the massive economic distortions
bequeathed by apartheid, "the cycle of poverty and privation which afflicts so many millions of our citizens will deepen, and that would be a betrayal of the mandate given to us by the electorate in the recent elections".
The department's director-general Alistair Ruiters and Maree conceded that access to finance remained a key challenge for black firms, saying the NEF hopes to address this.
Source: Trade and Industry
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