A newly established fund provides qualifying small and medium-sized enterprises (SMEs) in the agro-processing and manufacturing sectors with much-needed debt financing.

The South African SME Debt Fund was started in the second quarter of 2022 with an initial capital of R400 million. It is a partnership between Sanlam Investments and the Eskom Pension and Provident Fund (EPPF).

Among other things, eligible businesses should have a three-year track record, high growth potential, and stable business strategies. The fund is primarily intended to assist black-owned businesses, but all eligible applications will be considered.

In a number of important government plans, SMEs, especially those in the agro-processing and manufacturing sectors, are seen as strategic priorities. However, obtaining funding remains difficult.

Vukile Themba-Mketo, who is the portfolio manager at Sanlam Investments, and her team have been running several debt funds for the past 12 years. These funds give small businesses access to funding to help them grow and do well. Small businesses can get money from these funds to help them grow and do well. “We don’t want small and medium-sized enterprises (SMEs), which give hope for growth and jobs, to fall behind because of no capital. 

The EPPF’s chief executive and principal officer, Shafeeq Abrahams, says that the focus on these sectors is mainly because they have the potential to hire so many people. This creates a “multiplier effect” that makes the economy stronger.

The unemployment rate in South Africa will be 35.3% in the fourth quarter of 2021. As a nation, we must do better. We must import less, grow the economy, and ensure everyone has enough food to eat. At the same time, we have to get the required investment returns so the fund can pay benefits to its members.”

Do you qualify?

The funding is for SMEs in the agro-processing and manufacturing industries that have been in business for at least three years, have high growth potential, and have stable business strategies.

.Priority will be given by the debt fund to businesses that have been around for at least three years and showed signs of making money before the Covid-19 pandemic.

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