THE NEF PRESENTATION

About the NEF

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NEF Mandate…

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Established by the

National Empowerment Fund Act No. 105

of 1998, the NEF is a driver and

a thought-leader in promoting and

facilitating black economic participation

through the provision of financial and

non-financial support to black empowered

businesses, as well as by promoting

a culture of savings and investment

among black people.

The NEF is an agency of the dti and is the

only DFI exclusively mandated to grow

B-BBEE

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NEF Funds

Fund Focus Threshold

1 iMbewu Fund

SME Fund providing

Entrepreneurship,

Procurement & Franchise

Finance

R250 000 –

R10 million

2

Women

Empowerment

Fund (WEF)

Achieve minimum 40% of

enterprises owned and

managed by black women

R250 000 –

R75 million

3

Rural &

Community

Development

Fund

Supporting rural economic

development through New

Ventures, Acquisition,

Expansion & Greenfields

Finance

R1 million –

R50 million

4 uMnotho Fund

Funding of New Ventures,

Acquisition, Project Finance,

Expansion, Capital Markets,

Liquidity & Warehousing

R2 million –

R75 million

5 Strategic

Projects Fund

Early-stage investment in

industrial / manufacturing

transactions

Up to R75

million

Product / Fund Description Funding amounts

Entrepreneurship Finance For starting a new business R250 000 – R10 million

Procurement Finance For tenders and contracts R250 000 – R10 million

Franchise Finance For pre-approved franchise licenses R250 000 – R10 million

Acquisition Finance For black investors acquiring a stake in medium to

large companies R2 million – R75 million

Expansion Capital For growing an existing business R250 000 – R75 million

*New Ventures Finance Participation in green-field projects R5 million – R75 million

Capital Markets Listing on the JSE or its junior Altx markets R2 million – R75 million

Liquidity and Warehousing

The NEF has Black Facilitator status, which can help

black shareholders and companies wishing to sell a

stake while keeping the shareholding black

R2 million – R75 million

*Rural and Community Development

Fund

for agri-processing, tourism, mining & beneficiation,

manufacturing etc R1 million – R50 million

*Strategic Projects Fund

Venture-capital fund investing in early-stage projects

for the purpose of developing strategic industrial

capacity in poverty nodes, in renewable energy,

business process outsourcing, tourism, manufacturing,

mining and mineral beneficiation etc.

R1 million – R75 million

NEF Funding Products in detail On average, the NEF’s business loans are repayable over 4 to 7 years, and up to 10 years where marked with an asterisk (*)

below:

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Market Failures &

Non-Financial Support

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Market Failures Facing SMEs

MARKET FAILURES NEF SOLUTIONS

Limited own capital

Funding of between R250 000 and R75 million for

start-up, expansion and equity transformation

purposes as well as use of concessionary facilities.

Non-descriptive on % of own contribution.

Limited management skills,

including financial,

marketing and technical

expertise

Entrepreneurship Development tools and

dedicated mentorship support.

Access to affordable capital

Competitive cost of finance with a higher risk

appetite as well as requirement for operational

involvement (sweat-capital) reduces the need for

collateral payment.

Lack of accurate and

reliable financial information

Dedicated pre-investment mentorship support and

technical assistance with our partners.

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Market Failures Facing SMEs

MARKET FAILURES NEF SOLUTIONS

Poor Quality Business Plans

Collaboration with other Government

agencies like seda, incubation,

entrepreneurial training and general pre-

investment support and NEF Online

Business Plan-Tool Kit.

Lower bargaining and strong

competition power from

established businesses with

entrenched market dominance

Linkages and emphasis on the

implementation of the codes of good

practice (B-BBEE).

Wholesale Franchisor Facilities (Engen,

Nandos, etc).

Lack of access to local and

international markets

Linkages with off-takers. Relationships with

franchisors and corporates for access to

markets.

Mentorship

Ongoing mentorship support

Globally, 30% of start-ups fail in the first 2

years,

Less than 50% survive beyond 4 years,

Mentors across the country to help businesses,

Expert advice on strategy and operations,

Improve the chances of the business

succeeding,

Provided for free to NEF investees.

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Post Investment strategic drivers

and outcomes

1. Ongoing portfolio management

2. Regular collections management

3. Mentorship and technical assistance

4. Active board seats

6. Legal Compliance

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Provincial Dynamics Striving for growth across all provinces

Invested growth across all provinces

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1. As a national Development Finance institution

(DFI) the NEF is committed to ensuring that its

products and services reach the entire nation.

2. As a result, the NEF’s invested presence in

Gauteng has come down from above 60% of total

disbursed funds in 2006, to 45% by March 2015.

3. This is due to direct consequence of planned,

targeted and increased funding in the other 9

provinces because they are integral to South

Africa's economy, comprising 76% of the

population.

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Growing Black Industrialists

Creating Black Industrialists

Strategic Industrial Sectors

RENEWABLE

ENERGY

MINERAL

BENEFICIATION

AGRO-

PROCESSING

INFORMATION &

COMMUNICATIONS

TECHNOLOGY

INFRASTRUCTURE TOURISM

Biofuels

Biomass

Biogas

Solar

Wind

Hydro

Mining &

Mineral

Beneficiation

Chemicals

Agriculture

Telecoms

Broadcasting

Roads

Dams and Bridges

Sewer and Bulk

Services

B&Bs

Hotels

Guest

Houses

(Women-

owned)

Real Estate

Together with local & international partners the NEF has developed 20 strategic and

industrial projects worth R30bn, with the potential to support over 80 000 jobs.

The NEF’s future equity rights will total R4.2bn at financial close.

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Investee Stories

Some of the Franchises Funded to date

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Thank you Contact Details

www.nefcorp.co.za

WHERE TELEPHONE

1 Head Office,

Johannesburg

011 305 8000 or 0861843 633 /

0861 THE NEF

2 Eastern Cape 0861 633 327 / 0861 NEF ECP

3 Free State 0861 633 377 / 0861 NEF FSP

4 KwaZulu Natal 0861 633 596 / 0861 NEF KZN

5 Limpopo 0861 633 546 / 0861 NEF LIM

6 Mpumalanga 0861 633 678 / 0861 NEF MPU

7 Western Cape 0861 633 927 / 0861 NEF WCP

8 North West 0861 633 697 / 0861 NEF NWP

9 Northern Cape 0861 633 627 / 0861 NEF NCP