The Fund, which was initially capitalised by FirstRand in 2009, now has a total of R390m under management. Managed by FNB, in alliance with Edge Growth, it provides finance for early stage, high-potential SMEs that are unable to secure capital from traditional providers. Vumela has an established record of investment of this nature, having deployed in excess of R100m to date.
Head of Enterprise Development at FNB, Heather Lowe, says the programme is more comprehensive than any other solution that is currently on the market. "This differentiated solution is set up to bolster and be synergistic with corporates' other ESD efforts and subsidises the cost that corporates usually incur to start and run a programme of this nature. The concept is to help big business be more effective in executing its ESD strategies by providing it with financial and ESD specialists to work with it throughout the process.
"Our solution will help corporates meet the new B-BBEE requirements, which could see some companies downgraded if they do not empower their supplier base. More importantly, the holistic nature of our model could yield sustainable economic growth model mong the participating companies."
The structure of the programme will include alignment of existing supplier development strategies with the business strategies of participating corporates. This will be done by identifying current gaps and future opportunities in supply chains and recommending appropriate action. Companies will also receive support with the selection and sourcing of supplier SMEs to match them to adequate opportunities.
"This programme was shaped by over five years of learning in the supplier development space and is unique in how it addresses the specific constraints faced by both the corporate and the supplier to ensure access to market materialises. Not only does it bring a compelling financing alternative to the SME sector but also the solution is innovative in the way that it breaks down the barriers that typically prevent SMEs from accessing contracts from big business. Most importantly, this sustainable approach to supplier development will create a conducive environment for job creation and economic growth," said Daniel Hatfield, MD of Edge Growth.
To date, the Vumela Enterprise Development Fund has created over 300 jobs at a job creation efficiency rate of R100,000 - R120,000 investment per job created. The Fund also supports 501 jobs and forecasts creating a further 370 jobs from the current portfolio.
Listen to the podcast on https://soundcloud.com/fnbsa/heather-lowe.
