The National Empowerment Fund (NEF) – which currently falls under the auspices of the Department of Trade and Industry (dti) - is set to become a subsidiary of the Industrial Development Corporation (IDC) in order to meet the “considerable demand” for funding by black entrepreneurs.
This was announced last week jointly by the Minister of Trade and Industry, Dr Rob Davies, along with the Minister of Economic Development, Ebrahim Patel.
Both the IDC and the NEF have been identified by government as being central to “implementing radical economic transformation and development policies, particularly in light of renewed efforts to develop black industrialists”, said dti spokesperson Sidwell Medupe.
He pointed out that the merger was in line with government policy to consolidate South Africa’s development finance institutions to provide effective support to emerging and existing black entrepreneurs.
Medupe said the dti and the Department of Economic Development would appoint a technical team to drive the process. The Minister of Trade and Industry will continue to provide legislative and policy guidance to the NEF.
The NEF promotes and facilitates black economic participation by providing financial and non-financial support to black empowered businesses. It provides business loans from R250 000 to R75 million across all industry sectors.
Over the last 75 years the IDC has been instrumental in implementing the country’s industrial policy and establishing key industries, particularly in the manufacturing sector: petro-chemicals, mineral beneficiation, fabricated metals, agro-processing and clothing and textiles. In the recent financial results for period ending 31 March 2016, the corporation reported R14.5 billion in approvals including R11.4 billion in disbursements. In the same period the IDC has approved R4.9 billion for black-empowered companies, R2.9 billion of which was for black industrialists.
