• Capital boost

    Capital boost

    A ZAR340 million investment programme has been launched to financially support small businesses in South Africa.

    The Abadali Equity Equivalent Investment Programme (EEIP) programme, an initiative between the Department of Trade, Industry and Competition (dtic) and investment bank JPMorgan, will provide short- and long-term financing to SMEs in the industrial and green economy sectors.

    ‘This transaction will give a boost to the country’s localisation efforts, creating employment and helping to strengthen economic output,’ says dtic Minister Ebrahim Patel.

    According to Venture Burn, the Abadali EEIP comprises the Abadali Fund (a black-business growth fund) as well as the Abadali Grant. JPMorgan will provide ZAR300 million via the fund, and ZAR40 million via the grant.

    To qualify for short-term financing, SMEs must have a capital requirement of at least ZAR250 000 over one to 12 months.

    In addition, the fund will also provide medium- to long-term finance at subsidised rates to businesses that have revenue of ZAR1 million or more. Businesses that are majority black-owned and require funding for between two and five years will be considered.

    It is expected that the fund will generate ZAR2 billion worth of financing transactions and create 1 000 jobs over eight years.

    24 August 2021
    Image: Gallo/Getty Images