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Investing in Women Entrepreneurs

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.

Chana Boucher

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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.

www.businesspartners.co.za

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.

www.thedti.gov.za

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.

www.oldmutual.co.za

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.

www.idf.co.za

Khula

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.

www.khula.org.za

IDC

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.

http://www.idc.co.za/funding/tes.asp

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1 Comment

1 Comment

  1. Petronella du Toit

    Jul 28, 2012 at 14:48

    What about statistics of Woman actually funded by these wonderful programs? What about statistics on funding ratios such as applications submitted and actually funded? How about giving direct links to these programs instead of the company website link? How about real access to information? Great website though, thanks.

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Support for Women Entrepreneurs

11 Quotes On Hard Work, Risk-Taking And Getting Started From Beauty Billionaire Estee Lauder

The cosmetics tycoon provides lessons on the importance of passion and perseverance.

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Like most entrepreneurs, passion was at the core of cosmetics tycoon Estee Lauder. From a young age, Lauder was obsessed with beauty, and it wasn’t before long that she turned her dreams into reality. With the help of her chemist uncle, Lauder developed creams and other products that she would sell to local beauty stores in her hometown of Queens, N.Y. In 1946, Lauder officially launched her now world-renowned beauty company Estee Lauder with her husband Joseph Lauder. The business skyrocketed to success.

In 1998, Lauder was the only woman to land on Time’s top 20 business geniuses of the 20th century. In 2004, the year Lauder died, the beauty entrepreneur was named Time’s person of the year. Estee Lauder has become one of the biggest brands in beauty, with a worth of more than $50 billion. The company employs more than 46,000 people worldwide.

To learn more from Lauder and the cosmetics empire she built, here are 11 inspirational quotes on hard work, perseverance and getting started.

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Support for Women Entrepreneurs

Funding For Women Entrepreneurs – A Collective Effort

The bottom line is that while funders need to stretch further to reach female entrepreneurs, these entrepreneurs need to make their own efforts to connect and ready themselves to tap these resources. Only then will the latent economic value of women in our economy reach its full potential.

Jenny Retief

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women-entrepreneur

It is well recognised that women are powerful drivers of economic growth in South Africa, and are vital to the country reaching its full economic potential. Yet women account for only 18% percent of business owners in South Africa, according to the second Mastercard Index of Women Entrepreneurs (MIWE), released earlier this year.

The reasons are many, including lack of financial literacy, but one of the biggest constraints facing women entrepreneurs is access to finance. As most women entrepreneurs are concentrated in the informal sector, the majority of them access financing through micro-lending institutions, which offer only limited support. When they are ready to grow into SMMEs, they again face difficulties in obtaining loans from commercial banks.

According to the ‘Inaugural South African SMME Access to Finance Report’, published last year by the online access to finance portal Finfind, the SMME sector provides a “compelling, largely untapped market opportunity for innovative funders”, estimating the SMME credit gap at between R86bn and R346bn.

Finfind’s research showed that many SMMEs that are eligible for funding are still unable to secure it due to their lack of finance readiness, i.e., they are unable to produce the financial documentation required by funders to assess bankability and affordability, in order to approve their funding applications. These documents include up-to-date management accounts, latest financial statements, budgets, forecasts and tax clearance certificates, among others.

Related: Funding And Financial Assistance For SA Women Entrepreneurs

This was reiterated at the recent African Youth Networks Summit in Tswhane, where the head of Old Mutual Foundation Millicent Maroga stressed, “the key issue is a distinct lack of support in getting the business ready for funding”.

Enter initiatives like the Riversands Incubation Hub, a campus north of Sandton that houses over 150 established and start-up small businesses in subsidised premises, with access to business support services. One of its key values to its SMMEs is bridging the gap between them and the many players in the funding space, in particular through its annual FundEX event, a platform giving guidance and helping to match entrepreneurs with funders.

“Contrary to popular belief, there is funding available. FundEX provides practical guidance on what funding is available and what it takes to access this capital. It also gives entrepreneurs the opportunity to interact with a variety of funders, including banks, government funders and alternative funding platforms,” says Jenny Retief, CEO of Riversands Incubation Hub.

The theme this year is ‘Secrets of Scale’, unpacking what it takes to build a ‘fundable’ business. This is highly pertinent, as much of the complexity in the SMME funding environment is seated in the size of the business, and what stage of growth it is at.

Finfind’s research found that although SMMEs and start-ups may qualify for venture capital funding, funding opportunities for less scalable SMMEs are less promising. “This opens the door for new, innovative funding models to serve this section of the SMME market. Start-ups and micro-businesses represent a significant potential market for innovative funders who are able to develop new lending models tailored to address this growing market,” said the report.

As women proliferate in this space, they need to equip themselves with as much as information as possible about the funding opportunities out there, says Retief.

“The DTI, for example, offers funding programmes, and aggregators such as FinFind and others can help entrepreneurs navigate the more than 400 different funding solutions available in SA. Entrepreneurs can also boost their business by regular engagement with a mentor. Many incubation programmes offer this type of support,” she says.

Related: Watch List: 50 Black African Women Entrepreneurs To Watch

There are also many initiatives to bring resources closer to entrepreneurs. For example, the Technology Innovation Agency (TIA) offers Technology Stations in diversified sectors, ranging from agro-processing, chemicals, clothing and textiles to tooling. These provide entrepreneurs access to university-level technical levels and specialised equipment at affordable pricing levels.

This speaks to upskilling, a key offering of incubation hubs and critical for women entrepreneurs needing to become finance literate. “At Riversands, we have a team of coaches and mentors who guide entrepreneurs in specific areas such as finance or strategy. Relevant educational material is regularly presented in formal as well as informal ways and reinforced with practical coaching to help entrepreneurs put theory into practice in their own businesses.  This is flanked with professional bookkeeping services provided on a subsidised basis. This allows business owners to build the financial records and systems their businesses need to qualify for understanding,” says Retief.

The bottom line is that while funders need to stretch further to reach female entrepreneurs, these entrepreneurs need to make their own efforts to connect and ready themselves to tap these resources. Only then will the latent economic value of women in our economy reach its full potential.

Riversands FundEX takes place on August 16. For more information visit: http://www.fundex.co.za

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Support for Women Entrepreneurs

13 Female Entrepreneurs Rising To The Top In SA

These 13 black businesswomen are rapidly rising stars. You can learn from their journey and their entrepreneurial advice.

Entrepreneur

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Women all over the world are the powerhouses behind some of the newest, innovative start-ups and concept businesses. South African businesswomen are gaining momentum in this global arena too, with success stories like the 13 ladies below.

Female-led business growth is happening in South Africa, despite the latest Global Entrepreneurship Monitor (GEM) statistics showing that only 6.2% of South African females take the leap into entrepreneurship.

These 13 black female businesswomen are going against statistical trends and represent some of the rising stars in South Africa’s entrepreneurial landscape. 

  1. Boitumelo Ntsoane
  2. Phuti Mahanyele 
  3. DJ Zinhle 
  4. Polo Leteka Radebe
  5. Michelle Okafor
  6. Sonia Booth
  7. Basetsana Kumalo
  8. Sibongile Sambo
  9. Molemo Kgomo
  10. Nkhensani Nkosi
  11. Bonang Matheba
  12. Matsi Modise
  13. Khanyi Dhlomo
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