Development Finance

• Loans to 51 enterprises totalled more than R10-million in 2009

Limpopo is well served by institutions and agencies dedicated to supporting smaller enterprises. Whether they are cooperatives, individual entrepreneurs or emerging farmers, there is an agency from which assistance or funding can be sought. The provincial government
of Limpopo has made it one of its core aims to provide support to emerging businesses.

Development financing aims to build new businesses or support existing businesses as they seek to expand.

Provincial bodies
Limpopo Economic Development Enterprise
Limpopo Economic Development Enterprise (LimDev) is a social and economic development enterprise, operating as an agency of the
Limpopo provincial government. LimDev delivers services such as enterprise development and housing finance (through the wholly owned subsidiary Risima Housing), mining investment (through Corridor Mining
Resources) and mass transportation(via Great North Transport). The latter company has more than 500 busses on its books, transports
30 million passengers per year and employs more than 1 000 people.

Limpopo Business Support Agency
The Limpopo Business Support Agency (Libsa) supports SMMEs and other small enterprises with technical and other advice. In the course
of 2009, Libsa helped to establish 373 new jobs and saw to it that a further 1 370 jobs were sustained. In addition, Libsa (together with Land
Bank, LimDev and the Umsobomvu Youth Fund), facilitated loans for 51 enterprises to the value of just under R11-million.

Limpopo Business Zone
The Limpopo Business Zone is an initiative of the Limpopo Economic Development, Environment and Tourism (LEDET) department, set up
to ensure ‘one-stop hassle-free access’ to information for small businesses and start-ups in Limpopo. The Limpopo Business Zone website is a source of vital information about how to start a business, how to develop a business plan and how to seek funding and assistance
for managing a new business. Two recent examples of projects are the development of a province-wide database of cooperatives and the establishment of flea markets in all the province’s regions.

Limpopo Local Economic
Development Programme
The Limpopo Local Economic Development Programme is a European Union-funded initiative, designed to support pro-poor economic growth and to facilitate job creation. An amount of R374-million has been allocated to three funding vehicles: the Local Competitive Fund,
the Local Government Support Fund and the Marginalised Community Fund.

National DFIs
Development Bank of Southern Africa
The Development Bank of Southern Africa has approved loans of R29.8-billion since its inception in 1983. The focus of the bank is physical, social and economic infrastructural development. The bank is financier, advisor, partner, implementer and integrator in mobilising finance and expertise for developmental projects. The bank has been involved in several projects in the province, including supporting the creation of a modern animal-feed mixing and production plant at Limburg Citrus Feeds in the Waterberg district.

Industrial Development Corporation
The Industrial Development Corporation (IDC) provides finance across a range of sectors from agriculture to tourism. The corporation funded 270 businesses nationwide in 2008/09 compared to 210 the previous year.

Established in 1940 as a self-financing DFI to promote economic growth and industrial development, the IDC found itself at the centre of some debate during the world economic slowdown. Some analysts argue that the IDC should rescue troubled sectors, while others suggest that sectors that are not competitive should not receive artificial – and ultimately unsustainable – stimulation.

The IDC came down on the side of intervention, devising special schemes for the gold, jewellery, footwear, leather, clothing, textile and forestry industries. Two amounts allocated by the IDC had particular relevance to Limpopo: Pro-Forestry scheme (R100-million) and Pro-Orchards II (R200-million).

In 2008/09 the IDC approved funding in the amount of R10-billion, a new record-value. Most of this money was set aside for expansions and
new businesses. Limpopo projects include an Nguni cattle breeding scheme, the development of a ferrochrome smelter and a facility for
making coking coal briquettes. The LimDev development agency also receives support from the IDC.

Khula Enterpise Finance Limited
Khula Enterpise Finance Limited is a financing agency of the national Department of Trade and Industry. It has ties with the public and private sectors, including banks, retail institutions and retail ventures. It aims to fill the gaps not addressed by commercial financial institutions. Khula will lend about R3-billion to SMMEs between 2009 and 2013 via a subsidiary called Khula Direct. Khula is also looking for private investors to partner with the agency in supporting smaller enterprises.

Land and Agricultural Development Bank of South Africa
The Land and Agricultural Development Bank of South Africa (Land Bank) offers financing to established farmers and emerging farmers.

National Empowerment Fund
The National Empowerment Fund (NEF) is an agency located with the national Department of Trade and Industry which is geared towards
promoting broad-based black economic empowerment (BBBEE). A new initiative in 2009 saw the launch of an online business planner in five languages. Small businesses often have trouble developing business plans so this tool will help budding entrepreneurs in planning and presentation. A nine-step process includes cash-flow projections, managing financial statements, capital expenditure and balance sheets.

National Youth Development Agency
The National Youth Development Agency (NDYA) was launched on Youth Day, 2009, out of a merger of the Umsobomvu Youth Fund and the
National Youth Commission. As a statutory body, the NYDA will be closely monitored in the way that it disburses its allocation of R1-billion during a three-year mandate.

ONLINE RESOURCES
Development Bank of Southern Africa: www.dbsa.org
Foundation for African Business and Consumer Services: www.fabcos.co.za
Industrial Development Corporation: www.idc.co.za
Khula Enterprise Finance Limited: www.khula.org.za
Land and Agricultural Development Bank of South Africa:
www.landbank.co.za
Limpopo Business Support Agency: www.libsa.org
Limpopo Business Zone: www.limpopobizzone.gov.za
Limpopo Economic Development Enterprise: www.limdev.co.za
Limpopo Local Economic Development Programme: www.limpopoled.com
National Department of Trade and Industry: www.thedti.gov.za
National Empowerment Fund: www.nefcorp.co.za
National Youth Development Agency: www.nyda.gov.za

















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