zarIf you need micro finance for your South African business, then you’ll want to check into the Khula SME Fund. (SME is short for “Small and Medium Enterprises”.)

Khula is a wholesale finance institution, provides the main part of the South Africa Business Funds which operates across the public and private sectors, through a network of channels to supply much-needed funding to small business. It has been involved in the rapidly growing and economically vital, small and medium enterprise (SME) sector. Khula’s mission is to provide finance, mentorship services and small business premises to SMEs through a network of partnerships and to encourage the sustainable development of SMEs whilst ensuring that it remains financially viable.

Khula’s channels include South Africa’s leading commercial banks, retail financial institutions (RFIs), specialist funds and joint ventures. Its primary aim is to bridge the “funding gap” in the SME market not addressed by commercial financial institutions. Its products and services include loans from joint venture funds and RFIs for SMEs, loans for agriculture and mining. Its Khula Property Portfolio came about as an initiative from government to provide business premises to business startups or those expanding to medium sized businesses on highly subsidized rental in order to encourage small business operators to move into formal operating space.

Established in 1996 and operating as an independent agency under the auspices of the Department of Trade and Industry, Khula is recognised for its reputation as a major force in the development of the SME sector – a status it has achieved through its ability to adapt to the ever-changing challenges presented by the SME sector. Khula Enterprise Finance Ltd is dedicated to the development and sustainability of small businesses in South Africa. A leader in its field, it has a proud history of more than 13 years of service of involvement in the rapidly growing and economically vital, small and medium enterprise (SME) sector.

The company is a wholesale finance institution which operates across the public and private sectors, through a network of channels to supply much-needed funding to small business. Khula`s channels include South Africa`s leading commercial banks, retail financial institutions, specialist funds and joint ventures. Its primary aim is to bridge the “funding gap” in the SME market not addressed by commercial financial institutions.

Fund Overview

Khula SME Fund was established to provide early-stage and expansion capital to SMEs.

 Purpose of the Fund

  • Provide early-stage debt funding to qualifying SMEs (majority-owned by South Africans);
  • Reach out to SMEs in rural and peri-urban areas of South Africa;
  • Promotes black economic empowerment;
  • Improves access to finance;
  • Create new jobs; and
  • Encourage meaningful economic participation of black South Africans;and
  • Foster entrepreneurship for both men and women in the SME sector.

Applicant criteria:

  • South African SMEs (preferably black) who hold majority stake in their businesses who seek to start and or grow their businesses.
  • South African SMEs who hold majority stake in their businesses situated in rural areas.

(Information courtesy of Micro Finance Gateway, SEFA, and the South African edition of Entrepreneur magazine)