The City of Johannesburg and the Standard Bank of South Africa have announced a ZAR250 million (US$16.8 million) Working Capital Fund (WCF), to boost entrepreneurs and aid the city’s development.
The partners said the initiative aims to support Johannesburg’s economic transformation, and acknowledges that small businesses and entrepreneurs have an important role to play in the creation of jobs in South Africa.
The fund will focus mainly on the Information Communication and Technology (ICT), manufacturing, retail, health, transport, property and construction, green infrastructure; and sustainability sectors.
“This initiative will amongst others, promote entrepreneurship and develop enterprises to ultimately become mature businesses that can sustain themselves in the long term. A central principle of the Working Capital Fund’s funding philosophy is the collaboration between Standard Bank and the City of Johannesburg to find innovative equity funding solutions to meet the unique requirements of the City’s SMMEs and Co-ops,” says Kgamanyane Maphologela, director of customer communications at the City of Johannesburg.
Startups must meet a number of criteria to be eligible to apply for funding. The company must be a small, medium or micro enterprise (SMME), based and operating in the City of Johannesburg. The entity must have a legally binding supplier contract with the City; and applicants must have legally registered and be compliant with all legal and tax requirements.
In addition, the fund will look for startups with growth potential, a clear strategy, and scalable business model; while a management team with a successful track record will also be beneficial.
Funds invested may be used for asset acquisition or working capital. A number of “business development suppliers” have also been appointed by the fund, and will be on hand to provide investees with technical, financial and business development support.