Entrepreneurs looking for funding and especially those in underdeveloped areas received a massive boost from the European Union's economic development fund this week when R450 mil contributed to a emerging business fund.

With many SA entrepreneurs desperately looking for investment with which to develop their businesses and ideas this will be as welcome as a bit of rain to the many struggling farmers this summer. The question most of these business will be asking is where do we apply for a share of this money. Now that its available, what happens to it and does it ever really filter through to the entrepreneur on the ground?

This remains to be seen. The DTI and SEDA are the most likely candidates to have information on this so my guess will be to contact them first.

It is always great to see these types of confidence boosting headlines in the media, only to never hear what the on the ground difference was that the good news created. If some one knows and you are reading this please let us or contact me directly for a conversation or interview.

To your success,
Ben

Full article from Business Day here:
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Abdul Milazi
Johannesburg

THE small and medium-sized enterprises sector received a R450m shot in the arm yesterday when the European Union (EU) and the Industrial Development Corporation (IDC) launched a special funding facility for emerging businesses.

The facility, known as the Risk Capital Facility2 (RCF2), will be funded through the trade and industry department over the next three years and will be co-managed by the IDC and the European Investment Bank.

The RCF2 follows a similar successful funding structure, the Risk Capital Facility1 (RCF1), which had a R300m investment, leveraged R650m in co-investments and created more than 5000 jobs in 90 small businesses.

Lionel October, deputy director-general for enterprise and industry development in the department, said: "We believe that growing small enterprises is vital to achieving our goal of halving unemployment and poverty by 2014. Government is committed to building small business and to broad-based black economic empowerment.

This is a consistent theme of policies such as the Accelerated and Shared Growth Initiative for SA (Asgi-SA) and the economic cluster's programme of action."

The RCF2 funds will be co- invested alongside the IDC's mainstream business.

It will also have venture capital funds targeting specific sectors and third party investments where it will co-invest with other financial bodies.

IDC CEO Geoffrey Qhena said: "The IDC's primary objective as a development financier is to contribute to the economic empowerment of the South African population through the creation of jobs across various sectors of the economy.

"The RCF2 channels donor funding from the European Commission to deserving South African investments in response to development needs and opportunities for growth."

Qhena said R430m of the total amount would be available for investments in qualifying projects, while R20m would be used for ancillary costs.

The focus of the investments will be job creation in under- developed regions.

Lodewijk Briet, EU ambassador, said: "The RCF2 was designed to support sustainable employment creation and economic empowerment for previously disadvantaged individuals.

"Despite notable challenges, the successes of this programme have allowed us to consider funding for similar initiatives in the years ahead.

" The EU's support in this sector underscores our commitment to partner government in its undertaking to create a better life for all."

Qhena said that the economy continued to be affected by global competition and market forces characterised by highly competitive economies which could offer products of unmatched quality, price and quantity.

"There is also the ever present shadow of the legacy of past eco-nomic policies that continue to threaten the gains we have made.

'We continue to grapple with abject poverty, underdevelopment and joblessness."



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