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Industrial Development Corporation of South Africa | 5 September 2023

New NBI Fund is aimed at addressing the funding challenges many small businesses face.

The Industrial Development Corporation of South Africa (IDC) is excited to introduce its ground-breaking initiative that embodies the spirit of growth and innovation – the IDC credit facility to non-bank intermediaries.

This initiative marks a significant step forward in our mission to empower and elevate small, medium, and micro-sized enterprises (SMMEs) and those who provide them with financial support.

Non-bank intermediaries (NBIs) are financial institutions that do not have a full banking licence and cannot accept deposits from the public. NBIs facilitate alternative financial services, such as investment (both collective and individual), risk pooling, financial consulting, brokering, money transmission, and check cashing and are a source of credit along with licensed banks and development finance institutions.

SMMEs are usually diverse businesses operating in the service, trade, agri-business, and manufacturing sectors. SMMEs play an essential role in contributing to South Africa’s economic development. In 2021, SMMEs accounted for 24% of income and 58% of employment in the manufacturing industry, according to data from Statistics SA.

However, SMMEs face various challenges, such as:

  • Access to finance;

  • Affordable and suitable finance;

  • Collateral;

  • Access to markets;

  • Skills, experience, and track record;

  • Climate/environmental models for risk management;

  • Access to value chains and market-related prices for production inputs; and

  • Access to non-financial support.

The IDC aims to extend credit lines to NBIs to expand the funding reach to black-owned SMMEs, in part to address the funding challenges they face, thereby contributing to job creation and supporting economic development in South Africa.

The IDC is making a R3 billion credit facility available to eligible NBIs.

To qualify for this fund, non-bank intermediaries are eligible if they are 100% Black-owned with a three-plus-year track record or those with an eight-plus-year track record and a minimum 25% Broad-Based Black Economic Empowerment certification.

Let us usher in a new era of financial empowerment through the IDC’s NBI Fund.

‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.


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