While research has shown that most women entrepreneurs bootstrap their businesses in the early start-up stages, many require external funding to grow their businesses.
According to the White Paper on Female Entrepreneurship released by FNB, to grow their businesses around 50% of women entrepreneurs will seek external funding, and only 25% consider applying for a bank loan. The issue of securing external funding is a major hurdle for any business owner, but fortunately for some female business owners there are a number of funding programmes that are open to women applicants only.
Here are some of the funding institutions and programmes available:
Business Partners Women’s Fund
Independent enterprise is one of the most important vehicles for the empowerment of women in South Africa today. The Business Partners enables more female entrepreneurs to take up meaningful roles in the business community through its Business Partners Women’s Fund. Its strategy is to increase its footprint in the women owned SME arena. By assisting women with capital, skill and knowledge, resulting in wealth and job creation for themselves and their teams and thus contributing to the growth of the economy, the Business Partners Women’s Fund is at forefront of shifting the dynamics of the SME market to embody gender equality.
Isivande Women’s Fund
Isivande Women’s Fund (IWF) is an exclusive women’s fund established by the dti Gender and Women Empowerment Unit in partnership with Old Mutual Masisizane Fund. The fund aims at accelerating women’s economic empowerment by providing affordable, usable and responsive finance than is presently the case. IWF targets formally registered, 60% women owned and/or managed enterprises that have been existing and operating for two or more years with a loan in the range of R30 000 – R2 million.
Old Mutual’s Masisizane Fund
Masisizane’s mission is to be a leading development finance institution in South Africa that contributes visibly to economic transformation by enabling sustainable development of a large number of SMMEs, facilitating job creation, increased financial and business skills that in turn translates into significant social benefits to communities in the form of wealth creation, sustainable home-building, access to education, and re-investment into the economy.
Identity Development Fund
Identity Development Fund is pioneered and led by black women professionals. It is aimed at supporting the creation of high growth, self-sustaining businesses by providing financial and non-financial support to its portfolio companies. IDF is targeted solely at black-owned businesses, with an emphasis on businesses based in rural and peri-urban areas, as well as enterprises owned by youth and women. IDF has a great appetite for enterprises that are commercially viable, contribute substantially to socio-economic development, demonstrate high growth potential, present innovative business ideas, and result in the creation of new industries that contribute to the development of local economies, and build South Africa’s positioning in the global market.
A leader in its field, it has a proud history of more than 13 years’ service of involvement in the rapidly growing and economically vital, small and medium enterprise (SME) sector. The company is a wholesale finance institution which operates across the public and private sectors, through a network of channels to supply much-needed funding to small business.
Khula’s channels include South Africa’s leading commercial banks, retail financial institutions, specialist funds and joint ventures. Its primary aim is to bridge the ‘funding gap’ in the SME market not addressed by commercial financial institutions.
The Transformation and Entrepreneurship Scheme has been set up to finance marginalised groups in South Africa. The 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 Women Entrepreneurial Fund is part of the scheme, it 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, and finance is provided to businesses with a total asset base of up to R80 million and the maximum amount financed under this fund is R30-million a transaction.