Nedbank Corporate Social Responsibility executive head Poovi Pillay
Finance institution Nedbank on May 15 announced the launch of the R10-million Indalo Fund at the Indalo Inclusive Symposium at the Council for Scientific and Industrial Research in Pretoria.
The Indalo Fund is designed to change the way entrepreneurs are funded, creating a pipeline of viable businesses that will be ready to attract high-ticket investment, Nedbank points out.
Nedbank corporate social responsibility executive head Poovi Pillay explains that the Indalo Fund builds on the successful partnership between Indalo Inclusive and Nedbank, which has seen the creation of 215 enterprises with an average income of R5.9-million each.
Many of these enterprises are now at the stage where they can become eligible to attract larger investments from commercial lenders to scale significantly, he adds.
“When we launched our commitment to a green economy that works and delivers on the UN Sustainable Development Goals, we were clear that we wanted to make a significant positive impact to help create a new type of economy.
“Building on our experience over the past three years, we have decided to enhance the funding model in the final phase by introducing incentive- and performance-based grants.” Pillay avers.
He emphasises that this has important implications, allowing Nedbank to fund more enterprises with the same capital, and allowing enterprises to validate their status as investment-worthy businesses.
The current Indalopreneur programme covers four phases, each at its own grant level.
The final phase, Indaloaccel, is reached by enterprises with a business model that Nedbank says has already been proven to be successful.
These enterprises are considered ready for investment. The new Indalo Fund will come into play only in the Indaloaccel phase.
In terms of the new funding principles, enterprises receive 50% of the R250 000 Indaloaccel grant at the outset if they commit to creating a minimum of five full-time jobs at the minimum wage. They will also have to reach a number of targets relating to their environmental, social and economic impact.
Those enterprises that exceed their targets by 100% within 12 months are rewarded with the payment of the remaining 50% of the grant. Those that achieve only 50% above the job-creation target will receive only half of the remaining 50%.