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Johannesburg - A brand new financing offering has been launched by the Small Enterprise Finance Agency (sefa) and the Tourism Enterprise Partnership (TEP) to provide business loans to SMMEs in the tourism industry.
The purpose is to encourage development in this sector.
Given the difficulties experienced by SMMEs in gaining access to finance as well as the high rates charged by commercial banks, TEP saw the opportunity to establish the Ikwezi Tourism Facility (ITF).
ITF provides business finance to registered SMMEs in the tourism industry, including bridging finance such as short term financing to facilitate up-front contractual obligations; capital financing, such as the acquisition of new equipment and assets; and business expansion of current assets like buildings.
Ikwezi is a R50m ring-fenced, revolving credit facility exclusively reserved for TEP clients and is offered to all business owners, with preference given to black, women, youth and rural owned enterprises.
“Although there is a plethora of banks and other development finance institutions in South Africa, access to finance has always been a major challenge to SMME owners as they struggle to develop and grow their businesses," said TEP CEO Dr Salifou Siddo.
“The complaint from SMME operators is that, in addition to the complicated and time consuming red tape involved in the funding application process, the interest rates charged by commercial banks are often punitive and therefore unaffordable.”
He said access to finance is the missing link in SA's SMME development strategy.
"By adding access to finance, Ikwezi allows us to enhance our well established business development services offering to tourism SMME clients,” said Siddo.
Sefa CEO Thakhani Makhuvha said tourism has been identified as one of the key drivers for job creation in South Africa and features prominently in government priority programmes.
The purpose is to encourage development in this sector.
Given the difficulties experienced by SMMEs in gaining access to finance as well as the high rates charged by commercial banks, TEP saw the opportunity to establish the Ikwezi Tourism Facility (ITF).
ITF provides business finance to registered SMMEs in the tourism industry, including bridging finance such as short term financing to facilitate up-front contractual obligations; capital financing, such as the acquisition of new equipment and assets; and business expansion of current assets like buildings.
Ikwezi is a R50m ring-fenced, revolving credit facility exclusively reserved for TEP clients and is offered to all business owners, with preference given to black, women, youth and rural owned enterprises.
“Although there is a plethora of banks and other development finance institutions in South Africa, access to finance has always been a major challenge to SMME owners as they struggle to develop and grow their businesses," said TEP CEO Dr Salifou Siddo.
“The complaint from SMME operators is that, in addition to the complicated and time consuming red tape involved in the funding application process, the interest rates charged by commercial banks are often punitive and therefore unaffordable.”
He said access to finance is the missing link in SA's SMME development strategy.
"By adding access to finance, Ikwezi allows us to enhance our well established business development services offering to tourism SMME clients,” said Siddo.
Sefa CEO Thakhani Makhuvha said tourism has been identified as one of the key drivers for job creation in South Africa and features prominently in government priority programmes.
