Township Economy Partnership Fund
Township Economy Partnership Fund (TEPF)
The Township Economy Partnership Fund (TEPF) is a partnership between the Gauteng Department of Economic Development (GDED), the Gauteng Enterprise Propeller (GEP) and the Industrial Development Corporation (IDC). The fund supports SMMEs in the township economy of Gauteng in sectors that include (but not limited to) Manufacturing, The Taxi Economy, ICT, Backyard Real Estate upgrading and retail.
The TEP is a fund aimed at supporting vulnerable township small businesses that are unable to access funding from private funding institutions, government, and other business support programmes.
Information For Applicants
To qualify the SMME, CO-OPERATIVE OR START UP:
- must operate in Gauteng and have its head office in Gauteng
- be 100% South African owned
- be trading for over a year
- be registered with CIPC and
- be compliant with SARS
- have a valid South African identity document
- and be 100% SA owned
Informal traders must meet the following requirements:
- Have a valid South African identity document.
- Operate in Gauteng.
- 100% ownership by a South African citizen.
- Provide bank statements to prove operations.
- Provide an original and valid trading permit (only permits or licenses issued by the municipality will be accepted, councillor letters are not valid); and
- be registered and compliant with Companies and Intellectual Property Commission and the South African Revenue Service (assistance available if not registered or compliant yet).
To apply, SMMEs must submit the following:
- Certified identity document copies of directors/members.
- Business Profile.
- 3 Months Bank Statements and management accounts.
- FICA documents (e.g., Municipal accounts, letter from traditional authority).
- 6 Months Cashflow Projections – where applicable.
- Management Accounts after investment if applicable (assistance available).
- Other type of documents may be required depending on the nature of the application
- Informal traders must provide an original and valid trading permit (only permits or licenses issued by the municipality will be accepted, councillor letters are not valid); and be registered and compliant with Companies and Intellectual Property Commission and the South African Revenue Service (assistance available if not registered or compliant yet).
Information For Potential Intermediaries
TO QUALIFY AS INTERMEDIARIES:
- South African owned and registered company.
- Proven track record and capabilities in servicing the requisite target areas of the TEPF.
- Minimum of 5 years in operation in the interest of economic empowerment and development entities.
- Proven financially sustainable business model.
- Fair, democratic, accountable, and transparent.
- Socially and environmentally responsible – have an established Environment, Social and Governance (ESG) and Transformation Policy.
- Ability to crowd-in co-funding and leverage these partnerships.
- Contribute to building a robust, enabling, supportive and inclusive ecosystem in support of the social and township economy.
- Evidence of a strong pipeline of transactions.
- B-BBEE status level 4 and Black ownership of a minimum of 25%.
- TEP Funding must be ring-fenced from any existing business of the intermediary and should not be used to replace existing loans.
- Capital should not be pooled with other funds but be held and accounted for separately; and,
- A pricing regime that advances most of the financial advantage of the TEP funding to final beneficiaries.
- Investment criteria for finance from intermediaries/platforms and Strategic Implementing Partners to SMMEs:
- A loan, grant or blended approach will be applied to invest SMMEs via the TEP.
- All sectors in the economy will be considered for assistance.
- Priority will be given to businesses owned by women, youth, and people with disabilities.
- The maximum quantum for funding to be considered will be R10 000 000.
- The below requirements may be revised if economic conditions change, and specific focus is given to the change in conditions e.g., COVID19.
Some Areas That A Proposal Should Include (Not Exhaustive)
Provide details on structure of the Strategic Implementation Partner (SIP)/Fund.
Organogram/ Ownership structure.
What is the governance structure:
- Types of committees, roles, authority, composition
- How often in the year, will each committee meet?
Proposed Fund size
Funding (Rand amount) request from TEPF
Proposed implementation date
What is the term of the fund?
Other fund investors or partners investing in the proposal:
- Timeline and value of other investors’ commitment to the Fund (soft and hard commitments).
Describe the Fund’s focus area and how its meets the mandate of the TEPF and what benefits will be derived.
Quantify and motivate Market Demand or need for Fund’s focus area.
SIP/Fund Investment Thesis/Investment Opportunity:
- How does the Fund/SIP create value in the underlying investments
- Fund’s Investment Strategy.
- Fund’s investment Guidelines.
- Fund’s maximum and minimum ticket sizes per deal.
- Type of enterprises that will be supported e.g. only start-ups, expansions etc.
- Financial instruments and price of funding offered to final beneficiaries?
- Technical and business support: product offering, value, grant/loan, purpose?
- Job creation – quantify and motivate the number of jobs the Fund is likely to create both direct and indirect. Quantify black and female jobs to be created.
- Number of investments Fund is likely to conclude.
- Forecast of commitment, disbursement profile and reflows for 3 years.
- Is there a focus on Women or Youth?
- Provide organogram of the team (Principals, deal team, admin, post investment etc.) also indicating race and gender?
- Elaborate on track record of the team iro the area under consideration.
- Lessons learnt iro previous funds or investment experience.
- Describe deal sourcing mechanisms/capabilities and the process to identify investment opportunities.
- Management fees.
Investment Screening and decision making:
- Describe the initial screening and due diligence processes.
- Describe the process and systems for administration, documentation, reporting, decision making, legal processes.
- Authority levels in SIP/Fund– managing finances in the FM and Fund.
- Turn-around time for handling requests and applications?
- Comment of the Fund’s Legal agreements with potential investees.
- How will the FM control disbursement of funds to investees?
- Describe systems, processes and resources to monitoring clients,
- Provide details on the Fund’s reporting timelines and template for reporting on financial and developmental indicators.
- Provide details on the Fund’s IT Systems and resources for functions such as portfolio management, risk and administration.
Returns to TEPF
- Provide detail on the fund’s return profile – gross and net? Provide model.
- Impairments and write-off limits.
- Current pipeline of potential deals – size of pipeline, number of deals in the pipeline.
- Value and number of deals towards women, youth and black people.
- What is the conversion rate per quarter?
Provide ESG Policy and influence the Fund’s investment strategy.
Other supporting documents:
- CIPC registration documents
- SARS Tax Certificate
- B- BBEE certificate or Affidavit
- ID copies of Directors
- Audited Financial Statement
- 3 Months Bank statements
- Fica documents ( proof of address)
To apply to be a fund intermediary, send your proposal to email@example.com