Empowerment fund to aid tourism sector
The fund is to be unveiled by the Tourism Enterprise Partnership (TEP), a public-private partnership and non-governmental organisation focused on enterprise development in the tourism sector. TEP is looking to raise an average of between R10m and R30m a year through the new funding tool.
The new fund will be based on the new black economic empowerment (BEE) codes which will be effective from next year.
This is seen as a way of providing much-needed funding for small to medium enterprises (SMEs) in the tourism sector, while also allowing large companies to earn bonus points in the new enterprise and supplier development element of the BEE scorecard.
TEP provides SMEs in the tourism sector with training, mentorship, market access and funding. The latter comes in the form of small grants ranging from R5,000 to R50,000.
Larger companies that invest in enterprise supplier development solutions (ESDS), will receive upfront certification when they invest their enterprise and supplier development in ESDS.
"We want to use this as an opportunity to develop a database of SMEs that the tourism sector's large companies can procure from in terms of supplier development and SMEs that they can invest enterprise development into," said TEP's chief executive Salifou Siddo.
The Department of Tourism said TEP was originally funded by business through the Business Trust. When the trust folded and TEP experienced funding difficulties, the government stepped in to support the organisation on a 50/50 basis, although the government provides 75% funding.
"However this interim arrangement will be terminated at the end of the next financial year (April)", said the department's spokesman, Trevor Bloem.
There are 4,000 SMEs on TEP's database in sectors including accommodation, tour guides, tour operators and crafts. "Despite 75% of the funding coming from the state, the organisation struggles to meet the financial demand from SMEs," Siddo said.
Source: Business Day via I-Net Bridge