Old Mutual and Small Enterprise Foundation launch R19m womens' fund

Leading investment and savings group, Old Mutual (SA), yesterday announced a partnership between its Masisizane Fund and the Small Enterprise Foundation (SEF), a Limpopo-based NGO and micro financier, to create a R19.4m micro-finance fund aimed at supporting the development of women enterprises in rural areas.

The announcement marks the first micro-finance partnership that Old Mutual intends to create with like-minded organisations that share its vision and passion for poverty alleviation through job creation and the economic empowerment of women.
 
Old Mutual's Masisizane Fund is a Section 21 company that was created following the closure of the Old Mutual Unclaimed Shares Trust with a purpose of contributing powerfully to the economic transformation of South Africa.

Marshall Rapiya, Chairman of the Masisizane Fund, said Old Mutual joined hands with SEF because of the company's 15 year track record in South Africa and its desire to alleviate the plight of rural women who are hampered by lack of funding and support for their businesses.

"Rural women face many challenges and by providing financial backing to SEF, and tapping into our partner's micro-finance experience, expertise and successes, Masisizane can help address these challenges" added Rapiya.

SEF employs a group-based lending methodology patterned after the Grameen Bank of Bangladesh, which involves grouping potential members and rigorously testing the groups before they qualify for financial support.

Once groups are recognised they are eligible to apply for loans, which they collectively guarantee.  The rigorous process employed by SEF, together with in-depth training and ongoing support provided by SEF to the groups reduces the risk of default on the loans and enables collateral-free lending.

SEF will appoint field managers to provide business support and technical assistance to the women and will provide training to the managers on the micro-finance methodology. Old Mutual will provide the entrepreneurs with free financial education. SEF will also assist the women with the opening of bank accounts to encourage them to save and plan for their futures.

The size of the loans will vary from R500 to R12 000 and interest rates that will be charged will comply with and fall within the limits imposed by the National Credit Act. Repayments can be structured over periods of four, six or ten months.

John de Wit, SEF's Managing Director, commended Old Mutual for its recognition of microcredit as a powerful tool in the fight against poverty for self-employed South Africans.

"We are really excited about this partnership which will give SEF significant assistance to expand operations to the Eastern Cape, one of our country's poorest provinces.  We look forward to working with the very poor there and seeing them succeed in overcoming poverty through this opportunity," said De Wit.