About IDCTES is a R1 billion IDC ring-fenced on balance sheet Scheme, which is aimed at empowering entrepreneurs from various marginalised groups. TES plays a critical role in accepting a higher risk profile, which includes various concessions and incentives on the financing and entrepreneurial needs. The object of TES is to provide funding support to various groups that were excluded from participating in the economy. These groups include: women; people with disabilities; worker groupings; and community groupings.
Characteristics of the scheme
The defining characteristic of the scheme is to increase the access to finance by identifying high risk groupings through:
- The acceptance of the high risk nature of the target markets;
- The provision of pre- and post-investment business support;
- The provision of concessionary terms with respect to equity pricing and structuring; and
- An all inclusive pricing with no separate charge for fees.
Business Support
Business support will consist of a grant and will be provided during pre- and post-investment phases. This will include assistance in business planning, training and mentorship.
Investment criteria for all funds
All applicants must fulfill the following criteria:
- Must demonstrate economical viability and financial sustainability;
- Funding provided (including mainstream funding) will generally not be less than R1 million;
- Operations must fall within one of the sectors or regions in which IDC investment activity occurs; and
- Provisions must be made for the employment of people with disabilities.
Investment guidelines per fund
Women Entrepreneurial Fund (WEF)
- Minimum shareholding by women (woman) in the funded vehicle of at least 60%;
- Available for new entrants (shareholder/s having a direct or indirect total net asset base less than R15 million);
- Can be a start-up or an expansion;
- There must be operational and management involvement by women;
- Investee size is limited to a total asset base of R80 million; and
- Maximum investment amount is R30 million.
Equity Contribution Fund (ECF)
- Available for new entrants (shareholder/s having an individual direct or indirect net asset base less than R1.5 million;
- Can be a start-up, expansion, or acquisition;
- There must be operational and management involvement by black shareholders who are financed under the fund;
- Available to black shareholders where an entity is at least 25% plus share black owned;
- Investee or target company size is limited to a total asset base of R80 million; and
- Maximum investment amount is R10 million per transaction.
People with Disabilities Fund (PDF)
- Minimum shareholding by person(s) with disability(s) must be at least 50% plus one share in the investee company. In instances where this shareholding is not fulfilled, individual person(s) with disability(s) will be supported provided the investee company is at least 25% plus one share owned by person(s) with disability(s);
- Available to new entrants (shareholder/s having a direct or indirect total net asset base less than R15 million);
- Can be a start-up, or an expansion. Acquisitions for management buy-outs and buy-ins are also supported;
- There must be operational and management involvement by person(s) with disability(s);
- Investee size is limited to a total asset base of R80 million; and
- Maximum investment amount is R8 million per transaction.
Development Fund (DF)
- Finance to be provided to broad-based empowerment transactions, so as to support mainly black blue-collar workers to acquire shareholding into IDC funded projects;
- Can be start-up, an expansion or acquisition; and
- Maximum investment amount is R15 million per transaction.
Community Fund (CF)
- Finance to be provided to broad-based empowerment transactions, so as to support black community owned entities to acquire shareholding into IDC funded projects;
- Can be start-up, an expansion or acquisition; and
- Maximum investment amount is R10 million per transaction.
Who to contact
For more information on the Risk Capital Facility Strategic Business Unit, please click here to contact us or call us on 086 069 3888 or +2711269-3917. Alternatively, email our call centre at callcentre@idc.co.za
