Business Partners and Khula set up R150m fund
February 14, 2006
By Neesa Moodley
Durban - Entrepreneurs in the six provinces outside Gauteng, the Western Cape and KwaZulu-Natal will have access to R150 million in capital after the launch of the Business Partners-Khula Start-up Fund last week.
Khula Enterprise, an agency of the department of trade and industry, is the anchor investor with R120 million committed capital, while the balance will be provided by specialised investment group Business Partners.
The fund will be based in Durban and headed by chief operating officer Xolani Meva. Xola Sithole, the managing director of Khula, said the fund would exclusively target black-owned, black-managed and black-empowered small to medium enterprises.
"Special focus will be given to female entrepreneurs and the minimum target is a portfolio mix where 33 percent of the small and medium enterprises funded are owned by women."
Sithole said the long-term aim was to attract more investors to invest in the fund and increase capital available to R300 million.
Focus will be on businesses in the retail, manufacturing and services sectors. The fund is expected to create 362 new black enterprises of which a minimum of 120 must be led by women.
The investment earmarked for rural provinces is R95 million. Gerrie van Biljon, the executive director of Business Partners, said.
"We are looking specifically at provinces that are less economically active such as the Free State and Eastern Cape."
Business Partners hoped to create a minimum of 181 rural businesses and 2 900 jobs. The targeted investment in 2005/06 is R2.1 million, increasing to R27.2 million next year and then R49.3 million in 2007/08.
Biljon said that between 70 percent and 90 percent of new businesses ran into trouble by the third year of existence, so the fund would be offering start-up capital and ongoing support.
A separate R15 million fund will be established to provide technical assistance using Khula's Thuso mentorship scheme and Business Partners' mentorship programme.
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