sefa provides facilities to micro-finance intermediaries (MFI) to on-lend to micro and survivalist businesses requiring funding of up to R50 000 for the purpose of growing their income and asset base. Under special circumstances, and based on proper credit vetting and investment policy procedures, the amount may be up to R100 000 per single business/owner(s). These transactions occur in exceptional cases and are determined and assessed at the time of application. Prior approval will be required through the appropriate credit processes.
The business loans will be flexible and structured to meet the financing needs of MFI. Various equity instruments will be considered as part of the investment strategy into the MFI.
To qualify for sefa funding, the MFI must be/have:
A minimum of two years in operation, with the demonstration of microfinance lending
Early growth and established intermediary (start-up by exception) who display the potential to meet microenterprise needs and expectations in line with sefa’s mandate
The institution’s ability to meet basic criteria and the extent of risk sharing with sefa
Alignment of the institution’s operations to sefa’s developmental objectives
Must be registered and operate within South Africa and comply with all the laws that apply to legal entities in the Republic
Must comply with relevant statutory and regulatory requirements in terms of governance and compliance including a board, regulatory compliance, risk management policies, reviewers and all other governance requirements as per Companies Act. Institutional strengthening support will be provided where gaps have been identified
Lending to be in line with the National Credit Act with relevant and up-to-date registration
Key personnel – (eg. senior and executive management) must have the relevant investment and development finance credentials and no less than five years proven working experience as SMME investment analysts and/or microfinance specialists
Loan methodology including policies and systems to be able to assess, disburse, monitor and collect on loans
Financial systems ability and appropriateness
A 5% to 10% own contribution as a percentage of the loan amount or capital commitment may be required
Must comply with B-BBEE codes of good practice
Must be prepared to accept sefa interventions and business institutional support services.