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ENTERPRISE INCUBATION FUND (EIF)



Vision: Poverty alleviation through job creation

EIF Mission: To bridge the divide for access to affordable micro-credit for our beneficiaries as part of our enterprise development and job creation programme

EIF Objectives: In the main, the micro-finance programme aims to achieve the following broad objectives:

  • To provide small loans to enterprises in marginalized rural and peri-urban communities with a view to providing them with access to economic opportunities and enabling them to organize themselves financially.
  • To help HiH SA members qualify for loans at established MFIs by developing a track record of productive use of capital and financial discipline, including excellent repayment performance.
  • To enable HiH SA to reach its targeted audiences and thereby giving effect to its job creation mandate.
  • To mobilize human capital in lower income sectors to contribute meaningfully towards their own economic development.
  • To develop and promote sustainable methodologies for responsible lending to micro enterprises.
  • To strengthen the capacity of micro enterprises enabling their transformation into viable small businesses.
  • To increase access to finance through targeted market penetration and geographical spread across South Africa’s provinces.

Access to the HiH SA micro-finance programme is restricted to HiH SA beneficiaries. Currently HIH SA has a database of over 23,000 enterprises in the four countries. In order for our members to access funding they will have to demonstrate a record of savings and internal lending or trading normally over a period of three months.  Individual members may be required to contribute to projects from their own savings in conjunction with loans from the EIF.


To obtain a loan through the microfinance programme an entrepreneur must meet the following basic eligibility criteria:

  • Be, or be a member of, a HiH SA programmes, having successfully completed the required training programmes.
  • Have a good record of savings and having saved an amount sufficient to indicate the necessary financial discipline.
  • Operate formally or informally, generally recognised as a micro or small enterprise.
  • Have the skills, experience or potential that is appropriate to the enterprise that they conduct or intend to conduct.
  • Have a profit motive and be commercially viable and sustainable.
  • Be able to demonstrate sound cash flow or projected cash flow sufficient to cover loan repayment obligations and other expenses.
  • Be operating from established business or residential premises.
  • Have a funding requirement of R500 to R15 000.
  • Be older than 21 years

Loans are intended for productive purposes that generate and increase the income of the borrower.

Loans may be used for:

  • Start-up finance.
  • Working capital and operating expenses.
  • Investment in moveable and fixed assets, plant and equipment.
  • Raw material, supplies and stock.
  • Office equipment, furniture, fixtures and fittings.
  • Payments made in advance (e.g., for rent or for utilities).
 

Loans may not be used for:

  • Consumption.
  • Investment companies, investment trusts or other investment vehicles.
  • The purchase of shares.
  • On-lending or for the repayment of other debts.
  • Pyramid sale schemes.
  • Gambling.
  • Any illegal activity.
  • Activities, which are destructive to the environment.
 

The operating procedures will lay down a limit to the number of loans to be permitted to any individual or enterprise before they must transition to established MFIs or otherwise exit the EIF.  No loans are permitted to staff of HiH SA or to enterprises in which they have a financial interest.     

The Interest rate of all loans is 24% per annum for both group and individual loans

 

The Loan products on offer are:

  • Business term loans that is cash loan for stock purchase or other cash purchases
  • Asset loans that is a loan for buying equipment or machinery required by the enterprise
  • Agriculture loans that is loans within the agriculture sector