Small tourism firms offered R50m loan facility

Posted On Monday, 26 May 2014 14:43 Published by
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Small businesses in the tourism sector have the option of accessing a new R50m loan facility through the Tourism Enterprise Partnership.

Salifou Siddo  Tourism Enterprise Partnership

The Ikwezi Tourism Facility (ITF) is funded by the Small Enterprise Finance Agency (Sefa) and will provide small business with finance for up-front contractual obligations, acquiring equipment and assets and business expansion through the TEP.

Sefa is a government agency, the result of a merger between the South African Micro Apex Fund, Khula Enterprise Finance and the small business activities of the Industrial Development Corporation. It lends to small, micro and medium enterprises.

This month the TEP launched Enterprise Supplier Development Solutions, an empowerment fund that would allow large companies in the tourism sector to boost their empowerment scores by investing in small business. The fund, which aims to raise R10m-R30m a year, is based on the new black economic empowerment codes that will be effective from next year.

The TEP provides small and medium enterprises (SMEs) with training, mentorship, market access and funding. The latter comes in the form of grants ranging from R5,000 to R50,000. There are 4,000 SMEs on the TEP's database in sectors including accommodation, tour guides, tour operators and crafts.

Despite 75% of the funding coming from the state, the organisation struggles to meet the financial demands of SMEs. Ikwezi will provide funding at interest rates between 10.6% to 12.6%, "substantially lower than commercial banks", said TEP CEO Salifou Siddo

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