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A cooperative is an autonomous association of persons united voluntarily to meet their common, social or cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise and operated on cooperative principles.

Cooperative enterprises form part of the social economy, which contribute towards job creation and creation of common community wealth. It is on this basis that sefa promotes and facilitates the development of cooperative enterprises by providing accessible funding to these entities, and most importantly invest in community projects with huge social impact.

sefa provides funding mainly to two types of cooperatives: Cooperative Financial Institutions (CFIs) and enterprising cooperatives.

Cooperative Financial Institutions (CFIs) are deposit-taking cooperatives owned by a minimum of 200 or more members. They comprise cooperative banks registered in terms of the Cooperatives Banks Act and financial cooperatives regulated through an Exemption Notice issued in terms of the Banks Act. The financial cooperatives are regulated by the Cooperatives Development Agency (CBDA), while the cooperative banks are regulated by the South African Reserve Bank (SARB).

These types of cooperatives provide savings and credit facilities to their members.

To qualify for funding at sefa, the CFI must be/have:

• Duly registered with CIPC as a cooperative

• Valid deposit-taking license (duly registered with SARB and/or CBDA)

• Certified constitution

• NCR certificate

• Minimum membership of 200 people

• Minimum members’ shares /savings to the value of R100 000

• Savings and loan policies

• Have a full functioning board

• Valid Tax Clearance Certificate

• Must have been in operation for at least six (6) months

• A three- to five-year business plan with financial projections

• Proof of proper systems and process in place

• Outstanding loan book of at least R100 000

• Any other document that sefa may require

Maximum funding: Based on CBDA/SARB external credit threshold, eg 15% of the total assets

Maximum loan term: 5 years

Interest Rate: Risk Based

These are non-deposit taking cooperatives owned by a minimum of five (5) individual members. These types of cooperatives offer its members various services, except for savings and loans.

To qualify for sefa funding, the CFI must be/have:

• Involved in enterprise activities

• Valid CIPC registration Certificate

• Certified constitution

• Valid Tax Clearance Certificate

• Valid NCR certificate in the case of a secondary cooperative applying for business loans for the purpose of on-lending to CFIs

  • Secondary cooperative applying for business loans to have been in operation for at least three (3) months

  • Secondary cooperatives to have loan policies in place

  • Primary enterprising cooperative to have been in operation for at least six (6) months

• Minimum membership of 5 people

• Must have been in operations for at least six (6) months

• Have a full functioning board

• A three- to five-year business plan with financial projections

• Secondary cooperatives to provide pipeline of potential clients (CFIs) on upon application

• Proof of residence of the board members

• Any other documents that sefa may require

Maximum funding: R5-million per cooperative

Maximum loan term: 5 years

Interest rate: Prime plus