Letter to the editor: Khanyi Dhlomo on Luminance

2013-08-13 15:46

Thank you for your piece on the Luminance funding issue. I found it balanced and was pleased that it highlighted a number of key racial, political and business challenges that we have yet to overcome as a country.

I’d like to clarify a point that may have been misunderstood regarding other funding options we considered for Luminance as the manner in which it is covered in your column doesn’t accurately characterise my statements on this issue.

1) We (Ndalo Luxury Ventures – NLV) used a capital raising firm that approached most of the major banks, apart from the National Empowerment Fund (NEF). All of these institutions turned down the transaction for various reasons, with the start-up nature of the transaction being the primary reason.

Some said they did not fund start-up retail ventures in particular while others did not clearly explain their reason for turning down the transaction.

I have deliberately not named any of these institutions because I believe it is unnecessary to involve them in this issue, not because I am unable to come up with their names.

I also made this clear to the Mail & Guardian but they have intriguingly chosen to portray this fact in an inaccurate and self-serving manner.

2) In all the interviews I have chosen to do, (Talk Radio 702, Power FM, Mail & Guardian), I have spent a fair amount of time explaining that the risk associated with an untested start-up business is the most likely reason other funding institutions did not fund Luminance.

I have also explained how the NEF sought to mitigate these risks through the structuring of their funding of NLV. The terms of the NEF funding are commercially stringent. I would not describe them as those applicable to a soft loan.

3) I made a general statement about our financial institutions’ historical funding trends. It's an unfortunate fact and not a race card that black people, women, and especially black women are at the bottom of the funding list.

This is even more acute when one looks at loans for millions of rands. B-BBEE legislation is forcing our financial institutions to correct this but we all know that the pace of change in this regard is slow.

So in NLV’s case, my view (and what I have attempted to express) is that in addition to the points above, the fact that black female entrepreneurs and other marginalised groups have struggled to raise funding from our banks for significant amounts of money has made our funding journey tougher than what it would’ve been had we been white males.

I would appreciate these points being clarified.

Best Regards,

Khanyi Dhlomo

CEO: Ndalo Luxury Ventures & Ndalo Media

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