Development, Dr Zweli Mkhize, at the signing of a risk sharing agreement with
Standard Bank, Hilton Hotel, Durban
10 November 2006
Programme Director, Mr Sipho Shabalala, the Head of Provincial
Treasury,
Professor Mandla Mchunu, Director-General of the Province,
Mr David Munro,
Ms Karin Mathebula,
Mr Toy Mzimela,
Mr Melt van der Spuy,
Mr Errol Stewart,
All senior executives in Standard Bank,
Other senior managers and representatives of Standard Bank present,
Government officials present,
Members of the media,
Honoured guests,
Ladies and gentlemen,
This morning's gathering is the result of several months of negotiations
between Provincial Treasury and Standard Bank in KwaZulu-Natal. Our joint fund
venture will support the extension of the Small Medium and Micro Enterprise
(SMME) loan financing market in KwaZulu-Natal, in line with government's policy
to promote Broad-Based Black Economic Empowerment (BBBEE) and emerging
entrepreneurs in the small business sector.
An agreement has been reached to establish a joint risk sharing agreement
whereby both parties agree to share the risk associated with Standard Bank's
creation of a new Black Economic Empowerment (BEE) SMME loan financing facility
in the province. This portfolio is expected to grow to some R400 million in the
next few years. The funding for provincial government's R30 million
contribution in the form of a guarantee bond comes from the R200 million voted
in this year's budget held against Budget Vote six, which is Provincial
Treasury. The intention is that the KwaZulu-Natal Standard Bank SMME Fund will
complement other SMME financing initiatives being managed by the Provincial
Treasury, namely with Absa and Ithala.
I'm particularly pleased that we are signing this agreement with Standard
Bank not only because you are also our provincial bankers but you have proved
to be fully committed to developing the economy of this province, more
especially when it comes to assisting people from historically disadvantaged
communities.
The partnership between the province and Standard Bank will build on the
respective strengths of the two institutions. Through this partnership, an
enabling environment has been created for local economic development,
integrating with government's strategic objectives of building competitiveness
in our economy.
This is being supported by an integrated basket of financial and
non-financial business services. Broadening access to finance in the emerging
small business sector will simultaneously help to grow the economy, create jobs
and improve the living standards of thousands of citizens in the impoverished
communities of our province.
The requirements for applicants seeking to access funds in terms of this
joint venture arrangement are straightforward and include:
1. applicants must be South African citizens and be BEE SMMEs
2. the main business operations must be registered in the province of
KwaZulu-Natal
3. the sole proprietor, partner, member or shareholder who has a controlling
interest must exercise effective strategic and management control
4. the business must have a profit motive and be economically viable.
We can talk business with anyone who meets these requirements. For the
purposes of this fund we will consider loans from R100 000 to R3 million.
The participation, selection and credit criteria of this portfolio are
aligned to the province's objectives of:
* creating jobs
* broadening participation in the economy
* promotion of BEE and growing the black business base
* skills development and capacity building
* sustainable local economic development.
The province of KwaZulu-Natal is the second largest contributor to our
national gross domestic product (GDP). This fact notwithstanding, unemployment
and widespread poverty remain the biggest obstacles to development. Statistics
indicate that 32 percent of economically active people were unemployed in
KwaZulu-Natal in 2005. Women generally are worst hit by unemployment. Just
above half our population live below the poverty line.
We are working in a number of ways to seek solutions to unemployment and
poverty as part of an overall strategy to increase our economic
competitiveness.
Ladies and gentlemen, the KwaZulu-Natal Provincial Government-Standard Bank
SMME Joint Venture Fund is a living example of what can be achieved if
government and the private sector group their respective human and financial
resources for the greater good of all the citizens of the province and the
country. Truly, this partnership is testimony that we are indeed emerging from
the dark shadows of our divided past into the bright light of the age of hope,
which was the main theme of the State of the Nation address at the beginning of
this year.
I'm pleased to announce this morning that we already have some successful
applicants for the KwaZulu-Natal Provincial Government-Standard Bank SMME Fund.
Mrs Ellen Goldstone, who had been an employee of BP garage for 26 years, has
had the opportunity of acquiring a newly established BP service station which
is about 24 kilometres from the Sibiya Casino. The acquisition comprises of the
service station, Quick Express Store and Wild Bean Coffee Shop. Through her
company, Infinity 16CC (BP Franchise), she acquired finance from the fund to
the tune of R2,1 million.
Through the company, My Baby Transport Close Corporation (CC), Selby
Vilakazi and Mr Paris Dlamini have acquired a R350 000 loan. Mr Vilakazi is a
former employee of the Umsunduzi Municipality. He has entered into an
arrangement with the local municipality to harvest their timber plantations
which is sold to a forestry company. Finance was provided for the purposes of
working capital, the purchase of timber equipment and a motor vehicle. We are
also evaluating several other applications in a range of business sectors from
manufacturing to timber.
Ladies and gentlemen, I think this should give you an indication of how we
are expecting this fund to benefit the people of this province.
Once again my thanks go to Standard Bank KwaZulu-Natal for being "inspired,
motivated and involved" in the development not only of the economy but of the
people of KwaZulu-Natal.
Thank you!
Issued by: Department of Finance and Economic Development, KwaZulu-Natal
Provincial Government
10 November 2006
Source: KwaZulu-Natal Provincial Government (http://www.kwazulunatal.gov.za/)
