Acquiring A Loan For A Women-owned Business in South Africa

The number of female entrepreneurs in South Africa is tremendously increasing. According to a survey done by the Small Enterprise Development Agency [SEDA], 40% of small enterprises in SA are owned by women.

When it comes to accessing finance to start a business, females have limited access to finance compared to their male counterparts. This could be because most female entrepreneurs have a poor credit score- both business and personal. And the problem is that many lenders in South Africa generally rely on personal credit scores when lending. That’s why women with poor credit score may risk not getting funds for their start-ups. Fortunately, there are ways you can improve your credit score. Here is how to improve your credit score.

Women-focused lending institutions have been established to help women access funds for their new businesses. So, if you are a woman looking forward to starting a business, there are plenty of women-focused lending institutions that can you can get funds from.

In this article, we are going to discuss some of the top lending institutions that can lend women funds for their start-ups.

Let’s delve into them.

  1. Isivande Women’s Fund [IWF]

In 2008, the government partnered with Old Mutual’s Masisizane Fund and set up the R 100 million Isivande Women’s Fund. The fund invests directly in women businesses by offering loans at lower interest rates. It also offers non-financial support. The fund’s aim to reduce poverty to women entrepreneurs who are generally faced with limited access o finance.

How to apply for Isivande Women Funding

To be eligible for IWF funding, female-owned companies:

  • Must be operational for at least 6 months.
  • Must be requiring early stage capital for expansions and growth
  • Must be 50% plus one share owned and managed by women.
  • The business must require potential growth

Any business that is eligible for the funding. You can download application forms from www.iwf.co.za.

  1. Business Partners Women In Business Fund

This fund aims at increasing access to finance for female entrepreneurs in South Africa.  The BPWBF seeks to assist women with fair and equal opportunities to start, expand, and purchase existing businesses. The Women in Business Fund aims to:

  • Increase access to finance for female entrepreneurs
  • Invest in viable women-owned enterprises
  • Assist in the growth as well as expansion of women-owned enterprises
  • Contribute towards the increase in the number of successful women-owned businesses in South Africa
  • Promote job creation and decrease unemployment and poverty in South Africa.

Women-owned businesses need to meet the following criteria to be eligible for this fund:

  • Women entrepreneurs who wish to start, expand, or buy an existing business
  • Businesses with over 50% women shareholding

Women who want to apply for financing from the Women in Business Fund will have to submit their business plan to one of the Fund advisors, or they can send their business plan to enquiries@businesspartners.co.za.

  1. The National Empowerment Fund [NEF]

The National Empowerment Fund is a government agency set up to provide capital for black economic participation. It was established by the National Empowerment Fund Act, 1998. This fund seeks to provide financial and non-financial support for black empowered enterprises, and promote a culture of savings and investment among black people.

While this is not specifically a woman-focused entrepreneur fund, it does cater to black women and seeks to empower them to be part of the entrepreneurial society. The National Empowerment Fund provides business funds from R250, 000 to R75 million across all industry sectors, for startups and expansion purposes.

 It is worth mentioning that the fund specifically targets BEE candidates and consequently not available for other candidates. Whether your business is a start-up or existing, an applicant must fill in an application form once they have understood the Fund’s requirements and identified the products that suit them. Once that is done, the applicant will have to create a comprehensive business plan.

  1. The Identity Development Funding [IDF] Managers Funding

The IDF is one of the leading institutions in developing innovative financial products as well as offering non-financial support. This Fund seeks to unlock value in the entrepreneurial sector through fund management services for institutional and corporate investors.

Businesses need to meet the following criteria to be eligible for this Fund:

  • Black-owned and managed business [51%]
  • Black woman and managed business

The IDF Managing Fund focuses on industries such as but not limited to manufacturing, wholesale and retail, tourism, ICT, construction, etc.

Final words

Women in South Africa are proving to be a force to reckon with in the business world. Government and private institutions have created funds and resources specifically designed for women to help them grow and reach new potentials. Of course, without a doubt, these funds and resources can make these women more successful in their businesses, especially the financial and non-financial support aspect.