Research on possible low interest loans to promote media development and diversity

Background

The Media Development and Diversity Agency (MDDA) is a statutory development agency for promoting and ensuring media development and diversity, set up as a partnership between the South African government and major print and broadcasting companies to assist in developing community and small commercial media in South Africa, in terms of the MDDA Act No 14 of 2002.

Purpose

In terms of Section 14 (1) (d) (ii) of the MDDA Act of 2002, the Agency has the mandate to promote media development and diversity, through amongst others, negotiating with public utilities, organisations and financial institutions to acquire indirect support for projects, including support in the form of low- interest rate Loans.

In 2006, the MDDA commissioned the first phase of research into the viability of low interest loans in the community and small commercial media sector. The first phase of the study, involved establishing a framework for a media operation based on existing successful examples which include those elements considered most likely to facilitate a financially viable small media business capable of borrowing and repaying loan funds. Following an analysis of the findings and gaps, the MDDA now wishes to commission a second round of investigations into the feasibility and viability of a low interest rate loan scheme.

The purpose of this phase of the study is to go a step further in the context of the first phase, close gaps and engage with the various development finance institutions in South Africa like: Khula Enterprise Finance Ltd, Independent Development Corporation (IDC), Small Enterprise Development Agency (Seda), Development Bank of Southern Africa (DBSA), National Empowerment Fund (NEF), South African Micro-finance Apex Fund (SAMAF), Umsobomvu Youth Fund (UYF) and any other Development Finance Insitutions (DFIs) that specialise in financing Small Medium Micro Enterprises (SMME's) and Broad Based Black Economic Empowerment (BBBEE) initiatives to establish how they could partner with the MDDA in pursuit of the mandate to promote media development and diversity through supporting projects including facilitate the provision of loans in the media sector. Also, of interest to the MDDA will be the work and experience of the SAMDEF (based in Botswana), Media Development Loan Fund (MDLF based in New York) and Netherlands Press Fund in this regard. This phase of the study will therefore focus primarily on development of workable and implementable models and methods.

Objectives and scope

• To explore the extent to which existing development finance institutions can include media specific business loans including specific mechanisms to undertake this.
• To propose workable options and develop the modalities under each option for the provision of such loans, including the development of specific criteria.
• Propose how the MDDA can carry such a function out , giving specific reference to :
o Potential partners
o The role and contribution that these partners can/ should play
o The MDDA's role with regards to the provision of low interest loans
• Develop proposals/mechanism to enable the MDDA to facilitate access to finance by small commercial and community media on a sustainable basis including self financing.

Terms of reference

• Review the report of the first phase of research and widen the scope of the desktop study
• A detailed analysis of the constraints facing the small commercial media industry and concrete proposals to overcome these environmental constraints through engagement with relevant stakeholders and industry bodies
• Engage with relevant potential partners including the Independent Development Corporation (IDC), the Small Enterprise Development Agency (Seda), South African Micro-finance Apex Fund (SAMAF), the Development Bank of Southern Africa (DBSA), Khula, National Empowerment Forum (NEF), and the commercial banking sector about the possibility of introducing a loan fund specifically aimed at the media sector
• Once interested partners have been identified, to develop the specific mechanisms through which such loans could be made available to the sector, including clarification of roles and responsibilities between the DFI and the MDDA, criteria to guide the provision of such loans time frames and other related terms and conditions
• Identify international and local best practice examples and experiences of such low interest loan schemes and access to finance for media projects.

Required expertise and skills

The organisation that will be selected to conduct this study must demonstrate the following skills and experience in their proposals:-

1. Extensive research/field work experience.
2. Experience in doing work in a similar field.
3. Relevant media development knowledge and experience.
4. Understanding and expertise of the Development Finance landscape in South Africa
5. Ability to complete the research within a four month period or reasonable period within this framework.

Process

Interested organisations should submit the following information to Hariet Mhlanga () by 19 October 2007:

1. An organisational profile with three contactable referees
2. CV's of the people who will be responsible for the project
3. Submit an outline of the process to be followed
4. Proposed methodology
5. Detailed work plan and budget
6. Details of the HDI information of the bidder
7. Tax clearance certificate

Potential bidders are invited to a briefing to be held on the 12th October 2007, 15h00, at the MDDA Boardroom, 15 Sherborne Road, Parktown.

Reference documents

• MDDA Act, No.14 of 2002
• MDDA Regulations, No. 25570 of 2003
• Public Finance Management Act of 1999
• Treasury Regulations
• Phase One: MDDA Print Media Loan Fund Report and Findings
• Etc.

[All reference documents are available on the MDDA website at www.mdda.org.za and the government website, www.gov.za]

Timeframes

The contract will be awarded for a period determined by the MDDA on its discretion and satisfactory outputs/deliverable, also guided by the implementation plan.

Kindly submit your proposal to conduct the above and a reasonable quotation, by email to:
Ms Hariet Mhlanga
Email:
Tel: 011 726 3336

Submission deadline: 19 October 2007
Time: 12h00