introduction - sefa · web viewintermediaries include (but not limited to), non-banking financial...

THE ECOSYSTEM DEVELOPMENT FOR SMALL

ENTERPRISES (EDSE)

CALL FOR PROPOSALS

ENTERPRISE AND SUPPLIER DEVELOPMENT (ESD)

WINDOW

October 2019

TABLE OF CONTENTS

1. INTRODUCTION.........................................................................................................................................

2. BACKGROUND...........................................................................................................................................

3. CALL FOR PROPOSALS...............................................................................................................................

3.1 Intermediaries...........................................................................................................................................

3.2 Format of Submission................................................................................................................................

3.3 Closing Date.............................................................................................................................................

4. ESD Funding Window..............................................................................................................................

5. APPLICATION GUIDELINES.......................................................................................................................

5.1 Problem Statement, Results Chain and Outcomes.................................................................................

5.2 Who can apply.........................................................................................................................................

6. FUNDING CRITERIA..................................................................................................................................

6.1 Eligibility Criteria.....................................................................................................................................

6.2 Assessment criteria.................................................................................................................................

6.2.1 Technical Criteria.............................................................................................................................

6.2.2 Developmental Impact Criteria.......................................................................................................

7. APPLICATION PROCESS............................................................................................................................

8. DISBURSEMENT OF APPROVED FUNDS...................................................................................................

9. PROCESS FLOW........................................................................................................................................

Annexure A – Example of Contribution Split of Funds including Match Funding..........................................

Annexure B - Funding Windows Assessment Criteria.....................................................................................

Annexure C – Financial Intelligence Centre Act (FICA) Documents Checklist.................................................

Annexure D – Concept Note Template...........................................................................................................

EU/sefa Fund - Call for Proposals: Employment Promotion through SMMEs Support Programme

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Glossary of Key Terms Specific to this Call for ProposalsAssessment criteria: The set of indicators by which the application will be reviewed

againstTurnover rate The number of times the funds paid back to a fund (by

borrowers), are re-deployed into the fund before loan obligations are serviced

Concept Note The summary document through which application information will be provided

Cost of funding The interest and associated fees incurred by a borrower in relation to funding raised

Credit Lending The activity of extending loans on terms (with future dated repayments)

Credit Risk The possibility that a borrower may not repay a loan (extended to them) on the terms that have agreed upon

Debt Funding Money borrowed without the issue of sharesDevelopmental Impact Criteria

The set of indicators by which Developmental Impact will be measured on

Eligibility Criteria The set of indicators which qualify applicationsESD Practitioners/Programme Managers

Legally registered entities that intensify SMME development measures aimed at economic transformation through skills development, incubation etc

Full Business Plan Forward looking details of business objectives and how they will be achieved (including financial, operational, marketing sets of data)

Incubator An entity that provides support and resources to SMMEs to enable their growth and scale

Leveraged Funds borrowed in order to be deployed into an investment so as to increase the earning potential of that investment

Loan Book The value of all outstanding loans extended to SMMEsMarket Niche A gap that has been identified as a specific opportunity for the

provision of services in line with this Call for Proposals Match Funding The monetary contribution that the applicant must make (in the

stipulated proportion)Crowd-in Funding Monies raised from groupings of individuals, companies Pricing Regime The methodology employed in arriving at the fees and charges

appliedProgramme The set of objectives and measures set out by Government that

are chanelled through the fund sefa Mandate To foster the establishment, survival and growth of SMMEs and

Co-operatives, and thereby contributing towards poverty alleviation and job creation.

Short Dated Tenures Loans with a short maturity period, i.e, loans that have to be repaid within a short period of time, typically one to six months

Sunk costs An expense that has already been incurred and irrecoverableSupply Chain The network of activities and systems involved in the production

and delivery of goods and services which give rise to value and consequently provide SMMEs with opportunities to trade

Technical Criteria A set of indicators capabilities which Intermediaries will be assessed on

Wholesale Lending The financial practice of lending to intermediaries


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SUMMARY OF THE ESD CALL FOR PROPOSALS

Overview

Small Enterprise Finance Agency (sefa) in partnership with European Union (EU) through the Ecosystem Development for Small Enterprises (EDSE) is opening a Call for Proposals (CfPs) inviting applications from Financial Intermediaries (FI) to collaborate with sefa for the implementation of the Enterprise and Supplier Development (ESD) window.

Objectives

Overall objective of the programme is to support inclusive and sustainable economic growth and employment creation in South Africa in line with the Government of the Republic of South Africa’s objectives as described in the National Development Plan, notably to reduce the official unemployment rate.

Programme specific objectives are to:

Improve competitiveness of SMMEs and their ability to meet procurement requirements of large multinational/local corporations, government and state-owned enterprises;

Improve access to finance for SMMEs with limited access to finance; and Improve the regulatory and administrative environment for SMMEs.

ELIGIBILITY

Intermediaries who can apply (“Eligible Intermediaries”)

Non-Bank Financial Intermediaries involved in credit lending intermediation activities that benefit SMME

Corporates (and private companies) that have active ESD Programmes in their supply chains Incubators and ESD Practitioners/Programme Managers Commercial banks

Key eligibility criteria

Applicant’s alignment to sefa mandate and, to programme objectives Applicants must have the capability and capacity to provide credit lending instruments to

SMMEs and further, to de-risk and reduce cost of funding through this programme Ability to secure additional funding at a minimum ratio of 1:1


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CATEGORIES,

Applications will be divided into 2 categories and assessed accordingly;

Category Min. Amount Max. Amount Experience &

Track Record

Current Loan book (R)

A R10 million R30 million 1 – 5 years Greater or equal to Minimum Amount (Demonstration of having managed a loan book greater or equal to minimum amount)

B R20 million R100 million >5 years Greater or equal to Minimum Amount.

The category divisions above are differentiated on the basis of experience and track record in providing intermediary services in line with the Eligibility Criteria herein. Applicants with experience and a track record not exceeding five years can apply for up to the maximum allowable amount (R30 million) under Category A. Applicants with experience and a track record exceeding five years can apply for up to a maximum of R100million under Category B.

TARGET AREAS

The areas where the programme seeks to deliver impact are as follows:

Priority provinces – those with high unemployment rates; Women; Youth; People with Disability; Rural areas; Townships; and Peri-urban.

EVALUATION ASSESSMENT

Stage 1: Concept Note

Applicants are to complete and submit their concept notes on a template provided (Annexure D) and

email the completed and signed (by the authorised representative) to [email protected]. All

applicants will receive communication on the outcome of this stage.

NB: Passing this stage does not mean approval of application.

Stage 2: Full Business Plan

Applicants that pass Stage 1 will be requested to submit full Business Plans for further assessment of

their proposals. The business Plan should include at minimum, cashflow projections and its underlying

assumptions as well as scenario analysis. Confirmation of necessary compliance documents will need to


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mailto:[email protected]

be provided to sefa at this stage. This will among others include a due diligence exercise which will

include a site visit to the applicant premises.

Further communication will be made following decisions on the applications.

KEY INDICATORS – DEVELOPMENTAL IMPACTS

Number of SMMEs financed; Number of jobs created and sustained; Amounts disbursed; Race, gender & age composition of SMMEs ownership; People living with disability and Rural and Township economy.

INDICATIVE DATES

Concept Note Submission Date: 08 November 2019 (midnight)

Submission of the concept note in pdf format should be sent to [email protected]

Concept note document in relation to the call for proposal is obtainable at www.sefa.org.za


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http://www.sefa.org.za/


1. INTRODUCTION

Small Enterprise Finance Agency (sefa) in partnership with European Union (EU) through EDSE

is opening a Call for Proposals inviting applications from eligible Intermediaries to collaborate

with sefa for the implementation of the Enterprise and Supplier Development (ESD) Fund.

Enterprise and Supplier Development is a concept used in various countries to stimulate their

economies and to create greater diversity in supply chains. ESD is aimed at creating business

linkages between small and large businesses in the country through increased participation of

Small Businesses in mainstream economic activities, thus transforming the supply chains of

Corporates and creating sustainable jobs and businesses.

The SMME sector in South Africa is vital for the country’s economic growth and stability.

SMMEs create jobs for the semi and unskilled labour force that would otherwise remain

jobless, which in turn contributes to income equality and prosperity. SMMEs also foster

innovation and competitiveness in regional and global markets, as well as mainstreaming

transformation for black people and the youth in the economy.

2. BACKGROUND

The European Commission entered into a financing agreement with the Republic of South

Africa in July 2017, for the Employment Promotion through SMMEs Support Programme (the

Programme). The objective of the Programme is to contribute towards inclusive and sustainable

economic growth and employment creation through supporting small, micro and medium

enterprises (SMMEs). It is expected to contribute to the government's targets of reducing

official unemployment by reducing the cost of doing business especially for SMMEs as well as

by enhancing their business, marketing and production skills.

The specific objectives of the programme are:

To improve the competitiveness of SMMEs and their ability to meet procurement

requirements of large multinational/local corporations and state-owned

enterprises;

To improve access to finance for SMMEs and;


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To support relevant government institutions in their efforts to improve the

regulatory and administrative environment for SMMEs.

sefa was identified as the anchor entity for the implementation of the SMME Financing

component of the Programme. sefa was established on April 1st 2012 in terms of Section 3(d)

of the Industrial Development Corporation (IDC) Act of 1940, and remains a wholly owned

subsidiary of the IDC. However, sefa’s oversight and executive authority rests with the

Department of Small Business Development (DSBD). Critical principles underpinning sefa’s

operations and strategy includes:

• Addressing market failures

• Catalytic or unlocks latent potential

• Transformative imperatives

• Partnership: Cooperation, Coordination and

• Focus on the SMMEs and Co-operatives

The programme will focus its support to SMMEs in sectors identified in the New Growth Path

(NGP), National Development Plan (NDP) and Industrial Policy Action Plan (IPAP) because of

their high growth and employment creation potential.

3. CALL FOR PROPOSALS

sefa seeks to collaborate with Eligible Intermediaries with a view to catalyse the establishment,

expansion and growth of sustainable SMMEs in South Africa. The programme (EDSE) entails the

provision of holistic Wholesale Lending facilities by sefa to the selected intermediaries on a

pure debt basis, at concessionary cost of capital rates, for on-lending to SMMEs. The emphasis

of the Programme will be on improvement of access to finance by SMMEs and provision of

business development support to enhance their sustainability and, in turn, create sustainable

jobs. Various innovative debt funding techniques and structures (preferably short dated tenures

to increase the turnover rate), are solicited from both private and public sectors as partners for

South Africa’s development to achieve the stated objectives.

This fund will focus on providing funding to SMMEs in the supply chain of the large corporates

participating in the program as well as SMMEs participating in government procurement,


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especially around the 30% set aside for black owned SMMEs. SMMEs could be part of an

existing market, value chain, supply chain of both public and private sector entities.

3.1 Intermediaries

Intermediaries include (but not limited to), non-banking financial institutions, Corporates and

private companies, Incubators (including ESD Programme Managers) and Commercial banks

that hold funds from investors and/or lenders to avail credit products to SMMEs. These

institutions should have existing ESD solutions, focusing on the inclusion of 1high-risk SMMEs

and, further demonstrate the potential to reduce the prevailing cost of capital in their market

(through this programme) for SMMEs, thereby making the provision of funding solutions more

affordable in the sector(s) they operate in. Interested intermediaries should have the capacity

to mobilise required resources (financial, non-financial, systems, etc.) that promote SMME

growth and sustainability through amongst other requirements, credit lending processes and

access to markets. It is expected that these intermediaries have deep industry knowledge of

sectors and value chains opportunities and as a result can originate and support business

proposals with high job absorption potential. Priority will be given to geographic areas with

high unemployment rates. They may enter into partnerships with industry players to

complement their offering to SMMEs.

3.2 Format of Submission

Concept Note submissions in the specified format (see Annexure D), including any additional

supporting documentation that may be required, must be submitted via email to

[email protected] with the name and contact details of the Applicant, hard copies should

be accompanied by CD/disk title of the Window applied for, during or before the closing date as

indicated below. Concept Note forms must be completed, signed and emailed by the

authorised representative of the applicant in pdf.

1 High risk SMMEs – Those that would not ordinarily access finance from commercial banks due to lack of collateral/security, trading track record and experience.


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3.3 Closing Date

This call will be closed on 08 November 2019 at midnight. Late submissions will not be accepted under

any circumstances.

4. ESD Funding Window

The ESD fund aims to enhance collaboration between the private and public sector through

partnerships with financial intermediaries that have ESD programmes aimed at elevating the

growth and sustainability of SMMEs, thus sustaining jobs and alleviating poverty and economic

welfare of the targeted beneficiaries, underpinned by the following:

• Access to affordable funding;

• Access to markets for SMME products, hence their sustainability;

• Contribution to the development of small businesses, thus boosting their

participation in the mainstream economy; and

• Contribution to the economic transformation of South Africa.

It is also aimed at creating business linkages between small and large businesses in the country

through increased participation of Small Businesses in mainstream economic activities, thus

transforming the supply chains of Corporates and creating sustainable jobs and businesses. The

ESD Fund is premised on the partnership’s ability to de-risk enterprise development lending in

order to keep interest rates charged to SMMEs as low as possible as well as the ability to attract

other funding from corporates, other DFIs, and other government entities in order to leverage

and share risk as the fund lends to SMMEs that would otherwise not have access to finance.

The lack of participation by SMMEs (and more specifically, by Black-owned SMMEs) is due to

various obstacles including lack of business skills, track record and access to markets which

become hindrances to small businesses that wish to secure and seize business opportunities.

Similarly, the lack of access to funding is a hindrance which prevents SMMEs from being able to

fulfil orders. The objective of ESD is therefore to not only ensure that big businesses procure

goods and services from Black-owned SMMEs but also assist them to grow so that they can

participate meaningfully in the economy.


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5. APPLICATION GUIDELINES

5.1 Problem Statement, Results Chain and Outcomes

A clear description of the problem statement that the proposed intervention is aiming to solve

is expected. Furthermore, applicants will be expected to provide a detailed results chain which

clearly sets out the activities, outputs and expected outcomes that the proposal will achieve.

Programmes to be financed should demonstrate financial viability and should be technically

feasible, environmentally sound and economically desirable. sefa intends following a value-

chain approach in its promotion and development of small businesses particularly those

residing in the rural and peri-urban areas (including townships).

Among others, applicable key indicators to be measured during implementation will be the

following:

Number of SMMEs financed;

Amount approved and disbursed;

Funds leveraged (multiple);

Number of jobs created and sustained;

Gender & age composition of SMMEs ownership (Youth & Women);

Number of SMMES supported of people living with disability:

Number of SMMEs supported in rural and township economies;

Number of SMMEs supported (technical, capacity, business skills, mentorship,

etc.);

Number of SMMEs that demonstrate growth in turnover, profitability and

contribution to tax base.

These indicators will be routinely measured by sefa and will be verified annually by sefa.

5.2 Who can apply

This call is open to Intermediaries as defined in section 3.2 above. Existing sefa clients who are

in good standing are also eligible to apply. Intermediaries that can improve access to finance

for SMMEs operating in rural, township and peri-urban areas, SMMEs owned by youth and

women, SMMEs owned by people living with disability - particularly SMMEs supplying goods

and services to corporates and/or government value chains – are encouraged to apply.


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In line with sefa Credit Policy the following eligibility criteria will apply:

Applicants must be South African citizens, with valid South African Identity Documents

or legal entities controlled by South African Citizens with a valid South African Identity

Documents or permanent residents who hold a valid RSA ID document;

The financed operations must be conducted within the borders of South Africa, and the

controlling interest (>50%) of the business enterprise must be held by South African

Citizens with valid South African Identity Documents or permanent residents who hold

valid RSA ID document;

Operational involvement in the business by the shareholders and

The businesses should not have contravened the following regulations:

(1) The Prevention of organised Crime Act No. 121 of 1998 (POCA)

(2) The Financial Intelligence Centre Act 38 of 2001 (FICA) and

(3) The Protection of Constitutional Democracy against Terrorist and Related

Activities Act No 33 of 2004 (POCDATARA)

The ESD will target all sectors considered for funding by sefa (exclusions apply) if they agree

with the conditions of the funding agreement. sefa provides funding to the sectors indicated

below but not limited to:

Services (including retail & wholesale trade and tourism);

Manufacturing (including agro- processing);

Agriculture (specially land reform beneficiaries and contract-farming activities);

Construction (small construction contractors);

Mining (especially small-scale miners); and

Green Industries (renewable energy, waste and recycling management).

sefa funding excludes these sectors (labour brokers, manufacturing & selling of ammunition,

tobacco, alcoholic beverages, gambling & sex trade, non-profit organisation, political

organisations, person under debt review, un-rehabilitated insolvent shareholders of applying

entity, primary agriculture (except cash crops with offtake agreements) and property

development)


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6. FUNDING CRITERIA

6.1 Eligibility Criteria

A pre-determined eligibility criterion has been developed to ensure that each proposal that

proceeds to the business case application stage has the minimum operating experience,

required infrastructure (e.g. loan management system) and administrative capacity to

successfully implement the proposed programme and demonstrate promotion of SMMEs with

measurable and sustainable development impact.

Therefore, proposals must meet all of the following criteria:

The minimum funding request for Category A is R10 million with a maximum of

R30 million;

The minimum funding request for Category B is R20 million with a maximum of

R100 million;

Drawdown period will be a maximum of two and a half years (30 months) from

date of signing facility agreement - Implementation and delivery on the

proposed development impacts;

Applicant must be an intermediary as defined in 3.1 and demonstrate the

capability and capacity to provide credit lending instruments to SMMEs;

Applicants must be solvent and have auditable track record to substantiate the

funding amount being applied for; in this regard, complete annual financial

statements for the years they have been operating must be available, serving as

supporting documentation.

Applicants must demonstrate the ability to secure direct matched funding at a

minimum ratio of 1:1. Proposals that offer a higher matched funding ratio will

receive preference. The matched funding should comprise of cash contributions

and may be from a variety of funding sources and types (e.g. own cash, crowd

funding etc). Sunk costs will not be considered. Applicants will be required to

provide evidence of matched funding prior to first disbursement.

Annexure B provides detail on eligibility criteria against which the application will be assessed.


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The applicant’s proposal should be at a state of readiness with regard to implementation. This

means the proposal should not be awaiting any approvals (statutory, compliance, legal etc) by

the time stage 2 is concluded. Proof of these requirements should be submitted at any point

when required.

6.2 Assessment criteria

Applications will be assessed based on competitive scoring in each of the following indicators:

Indicators Weight

BBBEE Level (of the applicant) 15%2Minimum match funding ratio (1:1) 15%

Technical criteria 30%

Focus Area (Participation in Rural /

Township / Peri-urban areas)

20%

Gender, Equity & Social Inclusion 20%

Total weight 100%

6.2.1 Technical Criteria

The following criteria to select the most competitive programmes will include:

Criteria Weight

Accessible funding to SMMEs 20%

Access to markets 15%

Improved competitiveness of SMMEs 20%

Sustainability (beyond funding period) 15%

Capacity to implement 15%

Potential for Job Creation 15%

Total Weight 100%

6.2.2 Developmental Impact Criteria

An overall score will be allocated based on the following key indicators criteria: Number of

SMMEs to be financed2 Applications with more than the minimum match funding ratio may be consider favorably.


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Total Jobs to be Created

Township businesses

Peri-urban businesses

Rural business

% Disbursed to Black-owned businesses

% Disbursed to Women-owned businesses

% Disbursed to Youth-owned businesses

% Disbursed to businesses owned by People with Disability

7. APPLICATION PROCESS

Applications will include a Concept Note Assessment/s will be conducted in two (2) stages over

a period of approximately 3 months from date of closing the CfPs. The stages are explained

below:

Stage 1: Concept Note Assessment

Applications are to be submitted electronically and will be screened for eligibility. Eligible

applications will be scored against the assessment criteria, and ranked per window.

Applications that score competitively will be shortlisted and notified within twenty (20) working

days from the submission deadline. Only shortlisted application will be forwarded to the second

stage.

Stage 2: Full Business Plan

The detailed 3Business Plan (B) will be assessed and a comprehensive due diligence, including

site visit, will be conducted. Based on the outcome of the due diligence, proposals will be

submitted to the relevant Committee(s) for funding consideration and approval.

NB: Where the applicants are a grouping of legal entities that have formed a

partnership/consortium/joint venture/legal association, the parties are to provide:

a. The high-level structure and,

b. The lead party that shall be acting for and on behalf of all the members.

3 Over and above the normal areas covered, a Business Plan shall also include a costed Activity-based Implementation Plan (AIP), a Disbursement Schedule and a Monitoring Plan. Further details on this will be provided to the selected applicants at Stage 2 of the Selection Process.


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It should be further noted that sefa will request additional documentation from the selected

applicants at Stage 2 of the Selection Process.

8. DISBURSEMENT OF APPROVED FUNDS

Disbursements will be made in tranches. Successful applicants will be required to sign all Funding

Agreements and fulfil all Conditions Precedents (CPs) before a first disbursement / tranche can

be effected. Failure to sign the Funding Agreement/(s) and/or meet CPs within the specified time

period could result in the approval being rescinded.

Note: Successful applicants give consent for sefa to conduct credit checks on the applicant as

well as on the persons authorised to act on behalf of the applicant. (including influential decision

makers/role players) but not applicable to listed companies.


DISCLAIMER:

sefa reserves the right to not approve any application or make any disbursement to a programme.

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9. PROCESS FLOW


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ANNEXURES

Annexure A – Example of Contribution Split of Funds including Match Funding

CategoryMin. EU/sefa

Amount Applied

Min. Match Amount

Min. TotalMax. EU/sefa

Amount Applied

Max. Match Amount

A R10 million R10 million R20 million R10 millionAny amount above the minimum

applied for.B R20 million R20 million R40 million R20 million

OriginationAssessment

Selection

Developed criteriaCall for proposals

Appoint a technical evaluation committee to recommend FI for DD Evaluate proposed intermediaries against qualifying criteria Identify intermediaries for selection

The Technical Evaluation Committee will recommended intermediaries for due diligence sefa team to conduct DD sefa approval processess in line with Delegation of Authority

Annexure B - Funding Windows Assessment Criteria


Enterprise & Supplier Development (ESD) Fund

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Technical Criteria

1. Accessible funding to SMMEs – Proposals will be expected to prove that they will be

able to leverage other funding externally to enhance SMMEs access to funding.

Moreover, it is expected of them to pass on the benefit of concessionary lending rates

from sefa to SMMEs.

2. Access to markets - Submitted proposals should express clear linkages through the

identified sector/industry value chain and demonstrate developed key partnerships

with corporates and /or government entities. The above should further enable the

supported SMMEs to participate meaningfully in the supply chains of corporates and/or

government entities.

3. Improved competitiveness of SMMEs – Initiatives should clearly demonstrate ability

and willingness to capacitate SMMEs so that they are able to provide quality goods and

services according to the requirements of large corporates, government or state-owned

enterprises. Among others, this will include provision of technical, business and market

expertise to beneficiary SMMEs. These interventions should ultimately be traceable and

attributable where necessary.

4. Sustainability – Intermediaries should be able to demonstrate their sustainability which

extends beyond the funding term including the sustainability of the SMMEs they will be

supporting.

5. Capacity to implement – Applicants should have both the institutional and practical

capacity to implement their initiatives. They should demonstrate relevant experience,

organizational capacity, key capabilities and influence within the value chain. A key

consideration in awarding funding will be the strength and coherence of the initiative

proposed as well as the business case underlying it. This needs bolstering by referring

key experience requirements, such as credit sanctioning and debt/loan fund

management.

6. Potential for job creation: The primary mandate of the EU/sefa Employment Promotion

through SMME Support Programme is to support initiatives that demonstrate the ability

to create employment in a sustainable manner. Initiatives should demonstrate clear

ability to create and sustain new permanent jobs in the long run, either directly or

indirectly.

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Annexure C – Financial Intelligence Centre Act (FICA) Documents Checklist

Below is a list of the FICA documentation required:

Resolution authorising persons to act on behalf of the company

CIPC Documents (Certificate of incorporation, Certificate of commencement of business

Certificate of change of name (where applicable), List of company directors)

Valid tax clearance certificate

Confirmation of business address (not older than 3 months)

Certified Copies of IDs and utility bills for authorised persons (not older than 3 months)

Documents for company or individual holding 25% or more shares in a company

Note:

Applicants should have these documents documentation ready on application.


Technical Criteria

1. Accessible funding to SMMEs – Proposals will be expected to prove that they will be

able to leverage other funding externally to enhance SMMEs access to funding.

Moreover, it is expected of them to pass on the benefit of concessionary lending rates

from sefa to SMMEs.

2. Access to markets - Submitted proposals should express clear linkages through the

identified sector/industry value chain and demonstrate developed key partnerships

with corporates and /or government entities. The above should further enable the

supported SMMEs to participate meaningfully in the supply chains of corporates and/or

government entities.

3. Improved competitiveness of SMMEs – Initiatives should clearly demonstrate ability

and willingness to capacitate SMMEs so that they are able to provide quality goods and

services according to the requirements of large corporates, government or state-owned

enterprises. Among others, this will include provision of technical, business and market

expertise to beneficiary SMMEs. These interventions should ultimately be traceable and

attributable where necessary.

4. Sustainability – Intermediaries should be able to demonstrate their sustainability which

extends beyond the funding term including the sustainability of the SMMEs they will be

supporting.

5. Capacity to implement – Applicants should have both the institutional and practical

capacity to implement their initiatives. They should demonstrate relevant experience,

organizational capacity, key capabilities and influence within the value chain. A key

consideration in awarding funding will be the strength and coherence of the initiative

proposed as well as the business case underlying it. This needs bolstering by referring

key experience requirements, such as credit sanctioning and debt/loan fund

management.

6. Potential for job creation: The primary mandate of the EU/sefa Employment Promotion

through SMME Support Programme is to support initiatives that demonstrate the ability

to create employment in a sustainable manner. Initiatives should demonstrate clear

ability to create and sustain new permanent jobs in the long run, either directly or

indirectly.

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Annexure D – Concept Note Template

CONCEPT NOTE APPLICATION

APPLICATION INFORMATION

Applicant Name

Applicant Type

Initiative Name

Geographical Location (Province/s)(Please specify both Head Office location and proposed operational area)

A EU/sefa Funding Requested

B Matched Funding:

i Own Contribution

ii Funding Leveraged

Total Initiative Amount

ELIGIBILITY

Criteria Comment (maximum of 200 words per section)

BBBEE Level (of the applicant)

Minimum Initiative size met (Cat. A: R10million & Cat. B: R20million)

Technical criteria

Focus Area (Participation in Rural / Township / Peri-urban areas)

Gender, Equity & Social Inclusion

TECHNICAL IMPACT


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Criteria Weight Comment (maximum of 400 words per section)

Accessible funding to SMMEs

20%

Access to markets 15%

Improved competitiveness of SMMEs

20%

Sustainability (beyond funding period)

15%

Capacity to implement 15%

Potential for Job Creation %

Total Weight 100%

DEVELOPMENTAL GOALS

Key Indicators Comments (maximum of 200 words per section)

Number of SMMEs to be financed

Total Jobs to be Created

% Disbursed to Black-owned businesses

% Disbursed to Women-owned businesses

% Disbursed to Youth-owned businesses

% Disbursed to businesses owned by People with Disability


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INITIATIVE / PROPOSAL SUMMARY (1000 words)

PROBLEM STATEMENT (500 words)

SOURCE AND APPLICATION OF FUNDS

Source AmountApplication

(explain how these will be employed)

Sefa/EU R

Own Funds R

Leveraged R

Total R


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MOTIVATION ON: (1,000 words) Reducing the cost of doing business including a proposed pricing regime Enhancing SMMEs business performance, marketing and production skills Proof of SMMEs pipeline including a well-defined market niche and origination strategy Current loan book Focus area (rural, township, peri-urban, etc.)

INSTITUTIONAL ARRANGEMENTS (INCLUDING PARTNERSHIPS) (500 words) Governance structure including a credit risk mitigation strategy Policies and Plans Systems


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IMPLEMENTATION PLAN (SUMMARISED) (300 words)

Declaration of Information

This is confirmation that the above information is correct and true at the date of completion.

Name and Surname (in blocks): _____________________________________

Capacity: __________________________________

Signature: _________________________________

Date: _____________________________________


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PEP4 Declaration

Having read and understood the below referenced definition, I confirm that: (select only one of the

following options):

I am not a Prominent Influential Person (PIP) as defined below

I am a Prominent Influential Person (PIP) as defined below

Name and Surname (in blocks): _____________________________________

Signature: _________________________________

Date: _____________________________________

Please take not of the new FIC amendments Act which redefines PEPs to PIPs. The amendment act

further distinguishes between a Domestic PIPs and a Foreign PIPs. You may therefore want to annex an

extract of the PIP definition from the FIC amendment act (see attached).

4 PIP – Prominent Influential Person. Is an individual who holds, including in an acting position, for a period exceeding six months, or has held at any time in the preceding 12 months, a list of positions included in Schedule 3A of the Act. It includes positions such as: A prominent public function, this includes the function of President, Minister, Premier and others; A top position in a company dealing with an organ of state where a company provides goods and/or services to an organ of state with a transactional value in excess of an amount determined by notice in the Government Gazette; Heads of international organisations; A person who holds the position of head, or other executive directly accountable to that head, of an international organisation based in South Africa, and immediate family members and known close associates of the PIP.


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