By Zuko Komisa
FNB has launched a R200m Vumela fund to grow small businesses.
The fourth Vumela fund, worth R200 million and established on Tuesday by big four bank FNB, intends to provide alternative financing to 150 black-owned firms and generate 1 000 employment.
The commercial banking division of FNB created the Vumela Enterprise Development Fund in 2009 in collaboration with the venture capital and private equity firm Edge Growth.
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Vumela, which is isiZulu for “allow” or “enable,” seeks to develop novel financing approaches and aid so-called “missing-middle” black-owned small businesses.
Kaya Biz with Gugulethu Mfuphi spoke to Heather Louw, Head of SMME Commercial at First National Bank who spoke about the different iterations of the fund, and what the current aims to achieve.
LISTEN TO THE FULL CONVERSATION HERE:
Despite the importance of safeguarding depositors, FNB Commercial Head Gordon Little noted that the fund’s beneficiaries are not required to provide collateral or personal suretyship as part of the eligibility requirements.
“Not in this space … there’s a banking mandate where we’ve got to protect depositors. Here we’ve got a fund structure that has a different risk appetite,” said Little.
“I don’t think collateral is top of mind for us … We’re trying to make sure that we’re funding for what’s needed in that space. In many instances these are bootstrapped businesses,” said Little.
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