BY STAFF REPORTER
MIDDELBURG – The partnership between Steve Tshwete Local Municipality (STLM) and National Empowerment Fund (NEF) proves to be exactly what a good doctor had ordered for local entrepreneurs. A whooping R50 million is set aside through the Enterprise and Supplier Development (ESD) fund established between the two entities to assist and further develop Black-owned and managed businesses in the municipality. “The NEF will assist the municipality to accelerate Broad-Based Black Economic Empowerment domiciled in the Municipality, identifying fundable businesses and providing them a range of support interventions including mentorship, to enhance the chances of success,” explained NEF Divisional Executive, Setlakalane Molepo during a roundtable discussion held at Middelburg Banquet Hall on Monday. “The municipality will make a financial contribution of R20 million with the NEF committing R30 million for qualifying transactions on a 40:60 ratio,” he said. “Investment per SME are from R250 000 and for a maximum duration of five years. The municipality portion will be limited to a maximum of R5 million per transaction. The NEF will contribute a minimum of 60% of the funding requirement for each qualifying transaction and the balance of 40% will come from STLM contributions.” “Loans are repayable at prime-rate to be determined by NEF Investment Committees. The municipal contribution will incur a fixed interest rate of 5%,” Molepo said. However Molepo warned that sin industries such as tobacco, alcohol and related products were excluded by the fund’s investment. “These are industries that the NEF fund will not invest in because they are deemed to be detrimental to the community within which the qualifying SME is operating,” he said. Steve Tshwete Mayor, Cllr. Diphale Motsepe said that the partnership was indicative of the municipality’s commitment to grow the SMMEs sector. “We have decisively directed investment towards SMMEs development programmes. This has been informed by our understanding that this sector is a cornerstone of a sustainable programme including opportunities it presents through job creations. Our commitment to this initiative is further amplified by the joint partnership between ourselves, as the Steve Tshwete Local Municipality, and the National Empowerment Fund setting aside R50 million for Black SMMEs development,” he remarked.
He added, “Our strategic planning Lekgotla earlier this year, resolved that we will ensure continuous support emerging and existing SMMEs and co-operatives in orders to contribute to job creation. We further made a bold commitment to implement enterprise development in partnership with private sector. This is our delivery to this commitment.” Municipal Manager, Advocate Bheki Khenisa said the initiative was also part of the Covid-19 response. “This is part of the broader issues we looking at in response to the Covid-19. As a post Covid response, one of the things that we identified was that people have lost their jobs, and then what we needed to come up with was a counter-cyclical investment method that included infrastructure development,” he said. “So we went big on infrastructure which absorbed a lot of people work wise. But then we also realized that some of the people, who get tenders in the municipality, mines, retail, and logistics and so on, often lack the start-up capital. So we decided to come up with this idea to assist them reduce the high cost of capital.” Katlego Mphela, local entrepreneur, told Timeless News the partnership will be beneficial to her drone security business. “I am full of gratitude for this wonderful opportunity by the municipality to give the much needed assistance. It will surely be of great assistance in raising the funds I am in need of to get my business off the ground,” she said.
