FöK to SEF

completed

The Federal Financial Supervisory Authority has issued a development loan to the South African Small Enterprise Foundation (SEF). SEF has its headquarters in Tzaneen (Limpopo Province) and is considered the most professional microfinance institution in South Africa. The project is particularly relevant in terms of development policy, as SEF, as a non-profit organization, has the stated business purpose of reducing poverty and promoting employment. The main activities are mainly in rural areas of the poorest provinces in the country, Limpopo and Mpumalanga, where the Federal Financial Supervisory Authority's HIV/AIDS prevention programs are also located. Furthermore, SEF is an exemplary fit with the ideas regarding the target group, which consists of 99% women in small businesses. SEF relies on the tried and tested solidarity lending approach (group loans), but also enables individual loans to a small extent. Since its foundation, SEF has granted around 1.6 million microloans - in 2014 alone there were over 250,000. For borrowers, SEF is often the only reputable provider of loans. Since SEF is not allowed to offer savings products, SEF cooperates with the two banks, Postbank and Nedbank, and thus enables customers to build up microsavings in the formal financial sector. The developmental importance of SEF for promoting employment prompted the South African government in 2013 to distribute funds from the state Job Fund amounting to around EUR 6 million to SEF so that activities can be expanded to other regions and more women in rural areas can be offered employment opportunities. SEF fulfills this mandate by, among other things, opening branches in underserved regions.