The Small Enterprise Foundation Expansion Programme Project
Partner name: The Small Enterprise Foundation
Project name: The Small Enterprise Foundation Expansion Programme
Funding round: CFP 1
Funding: Jobs Fund grant R78 601 000
Matched Funding R38 900 000
Window: Institutional capacity building
Location: Eastern Cape, Mpumalanga and the North West
Partners: None
Problem statement:
Rural communities are often characterised by abject poverty and an over-reliance on government-sponsored social grants for survival. Microfinance institutions are one of the only avenues available to rural community members who need money and do not qualify for credit through traditional financial mechanisms and systems. However, microfinance institutions are themselves often small-scale organisations that struggle to grow and become sustainable, which further limits rural communities’ ability to access finance.
The Small Enterprise Foundation is a pro-poor, not-for-profit microfinance institution that works to eradicate poverty by creating a supportive environment in which credit and savings services foster sustainable income generation, job creation and social empowerment.
The Small Enterprise Foundation Expansion Programme aims to establish up to 30 new branches in the Eastern Cape, Mpumalanga and North West provinces. Eligible loan beneficiaries will be selected through a ranking tool, which enables communities to identify their poorest members. These identified members, who cannot be employed in the formal economy, will then form women’s lending groups, which foster peer accountability for loan repayments. Changes in poverty levels among participants will be tracked using a “progress out of poverty” index tool. Groups will be trained using the micro-credit programme and tšhomišano credit programme. Each member of the group then identifies an enterprise they want to be involved in and how much money they would require for this venture. The maximum loan that each member can qualify for is R1 200. Loan repayment cycles range from two to four months. A micro-enterprise is recognised when the entrepreneur has demonstrated, over at least a 12-month period, that their business is sustainable enough to generate sufficient revenue to allow for repeat loan repayment cycles.
Expected results:
New permanent jobs 6 129
Training completed 6 475