The National Empowerment Fund (NEF) has launched a R150m fund that will support black entrepreneurs in manufacturing.

Dubbed the Black Business Manufacturing Fund, the NEF said the fund will assist black businesses in manufacturing various products locally across all key sectors of the economy.

The state-owned development financial institution's divisional executive for SME and rural development, Nhlanhla Nyembe, said the fund was meant to achieve the NEF's and the government's plan of increasing the country’s "manufacturing capacity which is necessary to achieve inclusive economic growth".

"The fund will support companies involved in the manufacturing value chain, focusing on value addition. These include processing of raw materials into inputs for finished goods, conversion of raw materials into finished goods and adding value into semi-finished and finished goods including processing products for consumption."

The NEF's mandate is to promote and facilitate black economic participation through the provision of financial and non-financial support to black-owned and managed businesses. 

Nyembe said the NEF has been supporting black entrepreneurs to manufacture a range of products including cranes and aerial platforms, railway components, steel wheels and rims, car tracking devices, furniture, cotton fibre, textiles and clothing, sanitisers, medical masks and personal protective equipment, pesticides, condoms, mining components and roof tiles, among many others.

To qualify for BBMF funding, companies must be majority owned by black people – minimum of 51% black ownership; registered and recognised under SA laws; registered either as a private company, close corporation or co-operative; registered for tax and in good standing with Sars, and have a valid tax clearance certificate.

Nyembe said the companies should also be involved in the manufacturing value chain, including making and processing of goods with some sort of value add to products; create sustainable jobs; be commercially viable and demonstrate an ability to repay the loan.

He said the applicants should also be looking for funding for the acquisition of plant, equipment and machinery; improvement and upgrading of manufacturing processes; raw materials working capital; costs associated with delivering under export contracts; looking for funding for the importation of plant and equipment (provided that the business can demonstrate that such plant and equipment cannot be sourced locally); and looking for funding for the importation of raw materials provided such raw materials cannot be sourced locally.

“The ultimate mission is to drive the manufacture of quality products at competitive prices for local and export markets while nurturing manufacturing businesses in the right direction with mentorship support where required,” he said.