Transformation and Entrepreneurship Scheme

Making the mainstream economy accessible

The Transformation and Entrepreneurship Scheme has been set up to finance marginalised groups in South Africa.

Our aim with this scheme is to stimulate and develop largely small and medium enterprises, and make the mainstream economy accessible to marginalised groups - women, people with disabilities, and workers and communities.

The Transformation and Entrepreneurship Scheme is designed to help entrepreneurs access finance to develop and grow their business.

We offer funding for start-up businesses, expansions or expansionary acquisitions.

Along with this, we offer business support, by way of a grant, helping with business planning, training and mentorship.

Under this scheme, some R1-billion has been set aside for five funds:

• Women Entrepreneurial Fund;
• People with Disabilities Fund;
• Equity Contribution Fund;
• Development Fund for Workers; and
• Community Fund. 

Funding criteria

There are general criteria set out for all funds:

• Applicants must be able to demonstrate that their business is economically viable and financially sustainable.
• The business must be in one of the IDC's mandated sectors.
• Provision must be made for the employment of people with disabilities.
• Funding provided will generally not be less than R1-million. 

Specific guidelines have also been drawn up for each of the five funds:

Women Entrepreneurial Fund

• This fund applies to businesses with a minimum shareholding by women of at least 50%; shareholding between 25% and 50% will be considered on revised terms
• It can apply to a start-up business or for expansions;
• It is available to new entrants - that is, those shareholders with a direct or indirect total net asset base of less than R15-million;
• The business must include women in its operations and management; and
• Finance is provided to businesses with a total asset base of up to R80-million and the maximum amount we will finance under this fund is R30-million a transaction. 

People with Disabilities Fund

• This fund applies to companies where a person or people with disabilities have a minimum shareholding of 50% plus one share; shareholding between 25% and 50% will be considered on revised terms
• Applicants must demonstrate operational and management involvement;
• The maximum amount that can be financed under this fund is R8-million and applies to start-up and existing companies that wish to expand; and
• Only new entrants qualify for financing - that is, those shareholders with a direct or indirect total net asset base of less than R15-million. 

Equity Contribution Fund

• This funding is available for new black entrants where shareholders hold a direct or indirect total net asset base of less than R1.5-million;
• Only black individuals or individuals of a 100% black-owned company. In the case where the company is not wholly black-owned, the black shareholding must be 25% plus one;
• This fund applies to start-up businesses or existing companies that wish to expand Black shareholders who are financed under the scheme must be involved in both the operations and management of the company;
• A maximum limit of R10-million has been set for each application; and
• Finance is provided to businesses with a total asset base of up to R80-million. 

Development Fund for Workers

• This fund provides finance to Broad-based Black Economic Empowerment transactions for at least 85% owned black worker groupings to acquire shareholding in IDC funded projects;
• It applies to black low-skilled workers who may have little prospect of accessing equity;
• Businesses that can apply may be start-ups, or companies looking to expand ;
• The maximum amount that can be financed under this fund is R15-million per transaction;
• There are no restrictions on the business size;
• The workers must acquire a meaningful stake in the business.

Community Fund

• This fund provides finance to marginalised communities that want to acquire shares in a company funded by IDC;
• These businesses can be start-up, or companies looking to expand. The maximum amount that can be financed under this fund is R10-million; and
• There are no restrictions on the business size but it is a requirement that the community acquires a meaningful stake in the business.