An enduring commitment to excellence
Creating real economic value
This Integrated Report 2016 of the National Empowerment Fund (NEF) is an account of how a small organisation with a big mandate has bucked the trend of a global economic slowdown, defying the tide of a distressed national economy that has had to downscale its growth projections amid the face of rising unemployment and falling commodity prices.
This is the story of a development finance institution that has continued to create jobs and real economic value, bringing hope to many who are driven by the knowledge that because they are still disadvantaged economically on the basis of race, gender and geography, they have nowhere else to run to but to the funder with a soul.
The year under review saw the matter of the NEF’s recapitalisation continuing to be a critical priority for implementing the mandate of providing financial and non-financial support to black entrepreneurs.
The primary architecture of this report rests on the following pillars:
- Highlights of the year’s performance,
- The work in progress with the Department of Rural Development and Land Reform (DRDLR) to empower farmworkers to become entrepreneurs,
- Reflection on the Performance per fund and the related consolidated analyses,
- Lastly we will focus attention on the organisation’s Recapitalisation Initiatives.
I wish to acknowledge the entire staff compliment of the NEF across all the levels who are the glory behind the NEF’s performance excellence. These patriots are the jewel on the crown of the Empowerment Dividend.
The total value of approvals since inception to the 2015/16 financial year is R7.6 billion towards 770 black businesses; while R5.1 billion has been disbursed into the national economy.
It is pleasing to report that in the year under review the NEF approved 127 deals worth R1.2 billion against a target of 111 deals worth R880 million. The annual disbursements amounted to R819 million against a target of R691 million.
In accordance with national priorities job-creation remains one that is central to our purpose, and in this regard the NEF supported 4 938 job opportunities, of which 3 377 were new. This brings total job opportunities geared to be supported since inception in excess of 86 859.
The NEF’s performance in advancing the frontiers of black women empowerment this year was reticent, but this remains an area that receives dedicated attention through the Women Empowerment Fund.
30% of commitments made in the year were towards businesses partially or wholly owned by women, against a target of 45%. Total women ownership disbursed in the year is 29% vs target of 40%.
The NEF is a key role player in the Black Industrialists Programme which aims to promote and ensure the participation of black entrepreneurs in key strategic sectors of the economy.
The commitment to developing black industrialists saw the NEF increasing its tally on this important national imperative. As a result, the NEF can today speak of 31 strategic and industrial projects worth R29 billion, with the potential to support over 86 500 jobs.
The launch of the Northern Cape regional of office in the third quarter of the financial year means that the NEF is now a fully- edged national organisation with an of office network that cuts across the length and breadth of our beloved republic.
In relation to geographic activity we can report that since inception to financial year end, Gauteng now comprises 45% of the NEF’s total invested portfolio, which is a great improvement from the days when the NEF’s presence in Gauteng accounted for over 60%. The point must however be made that this is not as a result of a reduction of funding in Gauteng. This is a direct consequence of planned, targeted and increased funding in the other 8 provinces because they too are integral to South Africa’s economy. Over 76% of the country’s population resides collectively in the Northern Cape, the North West, Limpopo, Mpumalanga, Free State, Eastern Cape, KwaZulu-Natal and the Western Cape, and the point cannot be overemphasized that our national office network is indeed a historic achievement.