Fund gives community investment advice

2016-04-06 06:00
BONGUMUSA BIYELA, the new Northern Cape manager of the National Empowerment Fund (NEF), encourages the community of Hopetown to make use of their services.    Photo: Boipelo Mere

BONGUMUSA BIYELA, the new Northern Cape manager of the National Empowerment Fund (NEF), encourages the community of Hopetown to make use of their services. Photo: Boipelo Mere

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THERE is no point in having a heavy investment plan while you go hungry and your family is suffering financially.

This was some of the advice given by representatives of the National Empowerment Fund (NEF) when they visited the Northern Cape in March, focusing on the investor education campaign.

The NEF, an agency of the Department of Trade and Industry, visited at least four towns in the province on a mandate of advancing black economic participation by providing financial and non-financial support to black entrepreneurs, as well as promoting a culture of savings and investment.

The members of the Hopetown community that filled the Steynville Community Hall to capacity welcomed the advice, as it made sense to them that the investment would run out as soon as it had paid out, due to endless debt.

According to Lindi Mdaki, social support specialist of the NEF, it is best to know what you are saving for before requesting quotations.

The other towns the NEF visited were Kimberley, Douglas and Prieska.

The NEF already has an investment presence in the Northern Cape, which receives 2% of its invested portfolio, roughly in line with the province’s 2% contribution to gross domestic product (GDP). The NEF therefore believes the recent opening of its fully-fledged new office in Kimberley will improve this.

One of the flagship investments is in Desert Oil, a company that supplied fuel to Caltex outlets in the Northern Cape, in which the NEF has so far invested R22,3 million.

The NEF has launched its ninth office and now has one in each of South Africa’s provinces.

The investor education campaign also saw the introduction of the newly-appointed provincial manager, Bongumusa Biyela.

The investor education series was aimed at teaching individuals about the basics and the importance of savings and investment. Focused on black communities, the NEF’s initiative also targeted stokvels and other savings and investment clubs.

Aspiring and active small business owners were taught about the NEF’s own enterprise funding requirements, as well as business planning, mentorship and support.

“The bulk of the NEF’s work is focused on helping to establish and sustain black-owned businesses, but the investment education seminars allow us to connect with individuals whose savings and investment can be an important source of growth and job creation in the country,” Mziwabantu Dayimani, general counsel who oversees investor education at the NEF, was quoted saying in a press statement.

The NEF announced that it offered loan funding of between R250 000 and R75 million to viable black controlled and managed businesses. It also offers non-financial support such as online business planning, incubation, entrepreneurial training and mentorship to qualifying enterprises.

“All you have to do is get your papers in order; the money is available,” Biyela urged.

Noting that small businesses were the backbone and an essential feature of many of the towns in which the seminars are held, which tend to be outside major urban centres, Dayimani, highlighted that small businesses were critical sources of growth and employment, thus it also teached about the importance of small businesses to the economy.

“For the individual, saving allows them to improve the quality of life and to reach their financial goals while building towards a comfortable retirement. For the country, savings and investments create a pool of funds that can be used for productive investments and reduce dependency on foreign capital flows, which can be volatile,” added Dayimani.

Mdaki made members of the community aware that it was better to invest, rather than to save, as saving mostly resulted in unreasonable bank charges paid by the account holder. She highlighted how the money that one saved was invested by the bank somewhere else.

She further reasoned with the community that it is of no use to borrow money in order to pay off another debt.

“If that was the case with you, it means you are in trouble.”

She stressed the importance of drawing up a will and updating beneficiaries regularly.

“It is a fact that circumstances change on a regular basis. This might include death, divorce and other circumstances.”

Referring to pyramid schemes, emphasis was put on the community to shy away from these various schemes that pop up and collapse.

“There is always no one liable to refund the money if the scheme collapses.”

Biyela revealed that the office would continue with its roadshow in an effort to expose the people to NEF services.

“We have our office in Kimberley, but we will do our best to get to other towns in order to reach more people.

“We are committed to reaching more people in the next financial year,” he promised.

On the question of opening other offices in other towns due to the vastness of the province, he said that it would be too costly and that he would rather concentrate on roadshows.

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