South Africa: Old Mutual and DTI launch R100m women’s fund
South Africa, February, 19 2008 -
Old Mutual and the Department of Trade and Industry (DTI) have launched a R100 million development-finance fund – Isivande Women’s Fund - aimed at supporting women-owned enterprises in South Africa.
Isivande - a Zulu word for garden - came into being as a result of a study conducted by the Gender and Women Empowerment Unit of the DTI, International Finance Corporation (IFC) and FinMark in 2006 on women’s access to finance in South Africa. The study found that limited access to finance by women inhibits the establishment, growth, sustainability and profitability of women’s enterprises.
The Isivande Women’s Fund (IWF) marks the fourth partnership that Old Mutual’s Masisizane Fund has entered into with like-minded organisations that share its vision and passion for poverty alleviation through job creation and the economic empowerment of women.
The Masisizane Fund is a Section 21 company that was created following the closure of the Old Mutual Unclaimed Shares Trust with of the aim of contributing the economic transformation of South Africa through job creation, infrastructure development, capacity building and education.
The fund aims to accelerate women’s economic empowerment by providing affordable, usable and responsive finance for women-owned enterprises.
The target market for the fund include formally-registered enterprises that have been in existence for two or more years and that are at least 60% owned by women. The staff profile of the enterprise must be made up of at least 60% women of which 75% must be black. The staff complement must also include people with disability.
A total of 60% of funding will be made available for loans in peri-urban areas and 40% in rural areas in the first year of operation and 30% of the funding will be allocated to start-up businesses.
Loans Range from R30'000 - 2'000'000
Loans will range from R30 000 to R2m per business with a maximum loan-repayment period of five years. To be eligible for these loans, the businesses must have at least a two-year track record of business activity and must be operating according to a sustainable business plan.
The fund would finance start-up funding, business expansions, and business rehabilitations and turnarounds.
To enhance the chances of success of the enterprises that receive funding, the Fund will identify and package business support services that will be made available to the enterprises. Old Mutual will provide free financial education to women-owned enterprises through its Masisizane initiative and the DTI will be responsible for skills training, mentoring and after-care through third-party organizations.
Paul Hanratty, the Managing Director of Old Mutual (SA), says: “We are investing in the success of micro and small women-owned enterprises. Small businesses are the engines of real economic growth. If they grow, job creation takes place; and when jobs are created, poverty diminishes. This is real economic growth in action … when it is shared by all the people of our country.”
Marshall Rapiya, Chairman of the Masisizane Fund, said Old Mutual joined hands with the DTI because of a desire to alleviate the plight of rural women whose business ventures are frequently hampered by lack of funding and support.