Other possible financiers for exporters
Besides for the banking system and the DTI incentives, there are a few other organisations that the exporter could turn to, in order to obtain financing. These include:
- The Industrial Development Corporation (IDC) [Large-scale export projects] – The international finance division of the IDC assists exporters of capital goods by structuring finance – extended in rands or US dollars at guaranteed rates of exchange – to ensure that exporters receive payment of their full contract price on delivery. The division also offers short-term working capital finance to exporters for the execution of export orders. Click here to learn more about the IDC’s application procedures.
- Ithala Development Finance Corporation [Kwazulu Natal] – This is a general business financing corporation servicing the Kwazulu-Natal community that an exporter in the region might approach for financing for bridging purposes, acquiring plant and equipment, and for working capital. Click here to learn more.
- Export Capital [Export-orientated products] – This is a fund that was established with the primary purpose of financing projects and companies that will enhance South African exports.
- Innovation Fund [Innovative, cutting-edge products and R&D, commercialisation of products] – If you have a unique project or product that that is leading-edge, innovative and globally competitive and need financing to help with R&D or commercialising the project/product, then this is the fund you need to approach.
- National Empowerment Fund (NEF) [Black business] – This fund is aimed at helping grow Black economic participation and they will consider funding projects that will achieve this goal (including export-related projects). Although they are more aimed at larger businesses, the NEF may consider funding small and medium Black enterprises.
- Land Bank [Agricultural products] – Although they consider themselves a ‘bank’ the Land Bank is aimed at financing agricultural businesses and will certainly consider the financing of viable export-orientated agricultural projects
- Khula Enterprise Finance Ltd – Khula is an agency of the Department of Trade and Industry established to facilitate access to finance for SMMEs. They work closely with the banking system and essential underwrite loans that the SMMEs take out with a bank (or micro-lending institution). One of Khula’s main implements is their Credit Indemnity Scheme which aims to share the financing risk with banks thus enabling SMEs to access funding from a participating bank or other financial institution. Finance has to be approved by the financial institution and the latter will only apply to Khula for a guarantee where there is inadequate collateral. Khula is an important financing option for viable SMMEs. Click here to read more about Khula.
- Development Bank of Southern Africa (DBSA) [Large-scale development projects] – Although the DBSA will occasionally become involved in financing strategic development projects with an export focus, they do so in conjunction with other strategic partners such as national and provincial government, and other NGOs. They will not normally finance individual companies, even export-orientated ones!
- Coega Industrial Development Zone – Need to set up shop in an export-orientated development zone and need funding for this purpose? Try contacting Coega. Click here to read more about IDZs in South Africa.
- Export Credit Insurance Corporation of South Africa (Pty) Ltd – ECIC facilitates and encourages South African export trade by underwriting bank loans and investments outside the country in order to enable foreign buyers to purchase capital goods and services from the country. To achieve this, the ECIC evaluates export credit and foreign investment risks and provides export credit and foreign investment insurance cover on behalf of government.