Female Empowerment Funds in South Africa

As South Africa celebrates Women’s Month, it’s important to understand the struggles of female entrepreneurs when it comes to funding. A lack of funding prevents women from growing their businesses and innovating new products or services. To counter this, organisations and governments have established female empowerment funds in South Africa.

Female empowerment funds are aimed at increasing the provision of funding to businesses owned by women. In South Africa, the businesses that are supported by these funds are typically owned by black women.

Challenges Faced By Women

The pay gap is one of the many reasons that female empowerment funds have been established. Women face challenges of unequal number and scale when compared to men in business.

The gender pay gap is most glaring when it comes to access to funding. This prohibits women from taking advantage of economic opportunities and access resources to enable them to start, manage and grow their businesses.

To help women get funding for their businesses, we look at the different female empowerment funds in South Africa, and how their funding structure can help women entrepreneurs.

Types of Female Empowerment Funds

There are different types of female empowerment funds in South Africa. The most common ones include:

• Government grants for female entrepreneurs.
• Private sector investment in women-owned businesses.
• Non-profit organisations supporting women in business.

Although these funds have different ways of supporting women in business, they all have a focus on bringing down barriers that have previously prevented women from succeeding in business.

Government funding is usually given to businesses owned by people who were previously disadvantaged. Here we focus on the government grants that are specifically for female entrepreneurs.

Isivande Women’s Fund

The Isivande Women’s Fund is a government initiative developed by the Department of Trade and Industry and Competition. The fund is managed by the Industrial Development Corporation of South Africa (IDC) through Identity Development Fund (IDF) Managers.

The programme provides both short- and long-term loans. The funding ranges from R 30 000 to R 5 million. The loans can be in the form of debt, equity or quasi-equity. Receivers can use the funds as bridging finance, for growth, expansion or acquisition of a business.

The fund also provides business support for applicants. This is to help them manage their business properly ensuring long-term success.
To qualify for the Isivande Women’s Fund, your business needs to fall into one of the following categories:

• Your business must be black-owned and managed.
• Your business must be owned and managed by women.
• Your business must be owned and managed by black youth.

How to Apply for the Isivande Women’s Fund

Applications for the fund must be made through IDF Managers. To apply for the fund, you need to meet the following criteria:

• Your business must have been operating for at least six months.
• As an entrepreneur, you must be involved in the operational activities of the business.
• Your business must have growth potential.
• Your business must be commercially viable.
• As the business owner, you must be willing to receive business support.

Where to Apply for the Isivande Women’s Fund

You can apply for the Isivande Women’s Fund by completing the IDF online form. You can also contact the IDF at (+27)11 772 7900/7910 or e-mail info@idf.co.za.

Women Empowerment Fund (WEF)

The Women Empowerment Fund is an initiative developed by the National Empowerment Fund (NEF). The fund is aimed at accelerating the provision of funding to black female-owned businesses. The funding ranges from R 250 000 and R 75 million.

The funding stretches across a range of sectors, for start-ups, expansion and equity acquisition purposes. The WEF uses a range of different funding instruments. These include secured (senior debt) and unsecured (equity) loans and a combination of the two.

Funding requirements for the WEF include:

• Your business must have a minimum 51% black female ownership.
• Black women must be involved at the managerial and board levels.
• Commercial viability of your business case must be presented.
• Comply with all laws and regulations.
• You must be able to repay the funding received from WEF.
• Your business must actively work to create jobs.
• Your business must be in an underserved location such as rural areas.

For property transactions, at least 51% of the annual expenditure of the business is to be allocated to majority black-owned businesses.

Note: The NEF encourages the possibility of co-funding with private or public sector organisations for larger projects.

Application Process for the WEF

The NEF application process can take a little bit of time as all applications are screened thoroughly and individually. The application process is as follows:

Step 1: Screening of your funding application to check viability.

Step 2: If you pass the first step, your application is submitted to the Investment Committee.

Step 3: A due diligence process is done to check your documents and your business’s viability.

Step 4: A final report on your application is resubmitted.

Step 5: All legal processes and procedures are done to ensure that everything is in order.

Step 6: If all is in order, your funds will be disbursed.

For more information on the WEF, contact the NEF at applications@nefcorp.co.za or info@nefcorp.co.za. You can also call the NEF at (+27)11 305 8000/ (+27)861 843 633.

Private sector funding for businesses is usually in the form of venture capital funding and business support. The support is usually in the form of mentorship and helping the female entrepreneurs upskill and be able to grow their businesses.

Dazzle Angels

Dazzle Angels is an angel fund that focuses on female-owned businesses. The company has angels which invest money for funding and business support to female entrepreneurs and businesswomen.

The organisation targets businesses that solve real-world problems, have a sustainable business model, and are sustainable. The businesses must also be owned or co-founded by at least one woman.

The organisation provides funding to early-stage businesses. It also provides business founders with hands-on support.

To apply for funding through Dazzle Angels, visit the website and fill in the online application. For more information, contact Dazzle Angels at info@dazzleangels.com.

Note: Dazzle Angels is currently not directly investing in any businesses. However, they have partnered with a few lenders that cater for different funding options.

Masisizane Fund

The Masisizane Fund is a fund developed by Old Mutual aimed at providing enterprise development and funding to small to medium enterprises (SMEs). The funding is targeted at black-owned businesses run by the youth, women and people with disabilities.

The fund offers capital of up to R20 million.

To qualify for the Masisizane Fund, your business must fall within one of the following criteria:

• Your business must be black-owned.
• Your business must be youth-owned.
• Your business must be women-owned.
• Your business must be owned and run by a person with a disability.
• Your business must be located within a rural, urban or township area.

To qualify for funding through the Masisizane Fund, you must meet the following criteria:

• Your business must be owned by a majority 51% black South Africans or naturalised South Africans.
• The main shareholder(s) or owner(s) must be involved in the day-to-day management of the enterprise.
• Your business must be registered with the Companies and Intellectual Property Commission (CIPC).
• Your business must clearly define market-ready products or services.
• There must be active contribution from the owner(s) including financial or non-financial contributions.
• Your business must be in operation for more than 3 years.

Note: For SMEs, the Masisizane Fund has a funding limit of R 10 million.

Absa Women Empowerment Finance

The Absa Women Empowerment Finance facility is aimed at new and existing women-owned businesses. The fund provides funding of up to R15 million. Repayment terms for the loan are between 12 months to 5 years.

To qualify for the fund, you need to meet the following criteria:

• Your business must be conducted for profit reasons.
• You must provide proof of future revenue and loan repayment ability.
• Your business must be registered with the Companies and Intellectual Property Commission (CIPC).
• You must be a South African citizen.
• If your business is not new, your historic financial performance will be assessed by Absa.
• Your business must be 51% black-owned. Your business must be at least 51% women-owned.
• You must have industry skills and expertise.
• You must present a viable business plan.
• For purchase orders, you will need to present a business profile.
• You will need to open an Absa business account (if you don’t have one).
• The business owner(s) must have management control of the business on a day-to-day basis.

Note: Absa does not reject your application for funding if you do not have collateral.

To apply for this loan, you will need to contact Absa at  (+27)800 772 592. If you are an existing Absa client, you can contact your enterprise banker.

WomHub

WomHub is a boutique incubator and advisory firm that supports innovation within the STEM (Science, Technology, Engineering and Manufacturing) industry. The organisation provides business services tailored for female founders.

WomHub’s accelerator and incubator offerings provide its female clients with venture building and in-person and virtual incubator and accelerator support.

Additionally, the organisation provides co-working spaces which allow female-led businesses to relocate to a working space which supports their businesses.

Currently, WomHub is running a range of programmes including a Standard Chartered Women in Tech programme.

These funding platforms are just a few of many that provide funding for female-owned businesses. They are specially designed to empower women-led businesses as women continue to be met with barriers that prevent them from progressing.

As South Africa continues to build towards a better economy, small business success and jobs for all, women can become the leaders of this change. Female Empowerment funds in South Africa acts as the vehicle that makes this possible.

Before you apply for funding, you have to remember a few tips that will help you ensure that your application is successful. Your business must fit into the following basic criteria:

• Your business must be registered with the CIPC.
• You must be a South African citizen and over 18 years old.
• Your business must be in operation for at least a year or more.
• Your business must have a strong annual revenue.

These are just a few of the basic requirements you need to ensure you have to qualify for any kind of funding.