Agency to plug funding gap
A NEW agency aimed at funding small businesses has committed itself to doing things differently from traditional banks.
The Small Enterprise Finance Agency (Sefa) was formed less than a month ago through the merger of Khula Enterprise, SA Microfinance Apex Fund and the Industrial Development Corporation's small business lending book.
Loni Mamatela, interim executive of wholesale funding at Sefa, told Sowetan that the agency's mandate was largely funding, but it would also give monitoring and business R50,000 to R3-million.
People can find application forms at Sefa offices (those used by the merged institutions).
"The reason for that is because there are other institutions looking at non-financial support such as the Small Enterprise Development Agency.
The agency will have regional offices countrywide, depending on the economic activities in various provinces.
Mamatela said Sefa's strength would be its turn-around time.
"Turn-around time is important for SMMEs because they do not have the luxury of time. They have an order they have to deliver now or in the next five or seven days. If they do not do that, the opportunity passes to someone else," he said.
Mamatela said Sefa would be different from a traditional bank.
"If somebody says I have been blacklisted, we will consider the circumstances that led to that. We will consider things like repeat offenders ... more importantly, if you can convince us that you have made arrangements to carry out your obligations."
Sefa will consider even those who do not have collateral.
"There will be some instances where we will keep ownership of assets until we are fully paid," he said.
"Payment terms will depend on the cash flow of the business. Where the business is struggling because of market conditions there will be a workout and restructuring unit that will have to restructure a deal," he said.
Mamatela said it was important for small business to thrive since it would create employment. Sefa will later introduce products specifically designed for women and the youth.