Current Edition >> Archives Section >> Leading Stories >> 17-31 March 2006

Apex Fund comes to the Free State as a pillar of strength for poverty alleviation and micro enterprises

On March 3rd 2006, the quiet village of Makwane Village, Phuthaditjhaba in Qwa Qwa was the scene of the launch of the SA Microfinance Apex Fund (SAMAF), referred to as the Apex Fund. The event was hosted by the Deputy Minister of Trade & Industry, Ms. Elizabeth Thabethe, and the Free State MEC for Economic Development, Mr Neo Masithela. Senior officials of the Dept. of Trade & Industry (the dti), Free State municipal and government officials as well as over 800 community members attended..
As an initiative of the the dti, the Apex Fund has been established to address poverty, unemployment and skills development in the microfinance sector. As such the Fund acts as a wholesaler to partner organizations retailing to clients in their communities. For the Poverty Alleviation Loan Product, the target is households whose sole breadwinner earns less than R1 500 per month, with poverty targeting tool used as for this qualification. The Micro Enterprise Loan Product is for micro entrepreneurs requiring loans of up to R10 000 and who depend on their micro enterprises for their livelihood.
However, the Apex Fund is not only tasked with the provision of finance, but also to build institutional capacity and, through cooperatives, stokvels and burial societies, mobilize savings. In terms of savings mobilization, the real goal is to promote and encourage the creation of financial co-operatives and other indigenous savings establishments for the accumulation of locally owned and invested wealth.

Supporting entire communities
“With community based micro finance institutions often lacking in capacity, the Apex Fund is tapping into communities that are helping themselves to create wealth and assist them in achieving their financial and economic goals, thus improving the lives of not only clients but also entire communities.
“In the Free State, initially working is with three financial co-operatives, viz. Makwane FSC and Tseki FSC in QwaQwa and Thaba Nchu FSC in Thaba Nchu, but the launch must also be seen as a clarion call for other institutions to come forward to work with the Apex Fund in their communities.”, explained the Apex Fund Project Manager, Ntombi Msimang.

Deputy Minister's speech at the launch
Delivering the keynote address at the Free State launch of the Apex Fund on 3 March 2006, Deputy Minister of Trade and Industry, Ms Elizabeth Thabethe said this about the Apex Fund :
“Against this background one of the key mandates of government is for the Apex Fund to contribute significantly to halving unemployment and poverty by the year 2014, as well as stimulate and activate development at a local level. This will be done by providing households usually excluded from the banking sector with access to financial services. In so doing it will create employment, increase incomes and expand economic opportunities.
“The Apex Fund is moreover a targeted vehicle for the Accelerated Shared Growth Strategy for South Africa, which aims at increasing income and employment opportunities to 15-20 million people living in the rural areas or in shack areas outside the big cities. South Africa has a good experience of Self Help Groups and cooperatives and has also different financial institutions for micro finance, but impact on enterprise and job creation has been limited. The vision of the Apex Fund is to be a leader in developmental micro finance outreach and best practice in South Africa.
“To this end, the following three products are offered:
· Institutional and client capacity building including the establishment of good financial systems and strengthening of management teams;
· Savings mobilization through co-operatives and other formations such as burial societies and stokvels; and
· Affordable access to financial services through the Micro Credit Loan Fund, providing loans of up to R10 000 for households and micro entrepreneurs who depend on their micro-enterprises for their livelihood.
“The fund will take two forms: Firstly, micro credit for micro enterprise development and, secondly the poverty alleviation fund for clients with a household income of less than R1 500.
“In order to ensure the widest possible outreach, partnerships are being established with people's structures on the ground and existing infrastructure will be used for distribution. There has been significant progress with regard to operationalising the Fund. To date more than 60 institutions throughout the country have applied and are being considered for partner organization status to the Apex Fund. There are three in the Free State, including Makwane Village Bank. The project team is currently implementing the capacity building programme in preparation for the loan disbursements, which should be in place by June 2006. “Strategic partnerships have also been initiated with the Post bank, MAFISA, IDT and IDC, as well as Provincial Governments and soon the national Department of Social Development.
“The Apex Fund functions in close cooperation with other agencies such as the Small Enterprise Development Agency (SEDA), helping with business plans, technical advice and marketing, as well as information on export support, tenders and incentives, as well as with the Business Partners-Khula Start-Up Fund, currently capitalized at R150 million.
“In August 2005 the State President assented the Co-operative Act, effectively putting in place the first ever-comprehensive co-operative policy in SA. In this regard, I am proud to announce that the implementation of the policy has already started with the launch of a co-operative Start-up Grant of up to R300 000. In accessing this grant, co-ops will be expected to contribute 10%, which can take the form of skills or basic assets,” the Deputy Minister said.
“Increasing the number of people who are meaningfully participating in the economy, however, is not sufficient and growing the economy is equally important. In this regard, significant efforts are being directed towards enhancing the competitiveness within the economy and to increasing levels of investment, such as providing social and economic infrastructure; reducing the cost of doing business; developing priority sectors; strengthening domestic and regional markets; and increasing market access; within the context of a stable, development orientated macro-economic framework.
“The Free State government has established a good track record of partnership and we appreciate the efforts that went into the preparations for the launch of this fund and I am confident that you will ensure that the programme launched here today, will be amongst the best.
“The Fund has disbursed more than R10 million in the past eight months on loan funds and operational expenditure of 17 micro finance institutions. It will spend another R20 million on a capacity building and branding exercise with 20-25 partner organizations creating more jobs in the next three to six months.”

Free State
Thus for the Free State the Apex Fund comes as a pillar of strength for the severely under-resourced microfinance sector and the elevation of this sector to realise its huge potential as a contributor to economic development and social progress in the province.
To this end, prospective clients are welcome to contact the Apex Fund as per the accompanying details. Contact details for the Apex within the Free State will be available with effect from 15/05/2006.