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Empowerment financing and enterprise and supplier development

To promote enterprise growth and job creation, there is a need to grow the black business sector, from entrepreneurs and small business owners to large businesses.

Standard Bank has well-established programmes to support empowerment financing and enterprise development. Our enterprise development team works closely with our procurement team to ensure we make the most of opportunities to incorporate small enterprises into our supply chain and help them grow into larger businesses. We scored 23.65 out of 29 for the empowerment financing and enterprise development element (including 2.53 of 4 bonus points).


We scored 9.6 out of 9.6 for empowerment financing – targeted investments. This category includes targeted investment in transformational infrastructure, black agriculture and affordable housing, as well as black SME financing.

From 1 January 2018, we made targeted investments of R5.8 billion, including but not limited to:

Transformational infrastructure
in transformational infrastructure
Black agriculture icon
in black agriculture
Affordable housing
in affordable housing
Black SME icon
in black SME financing

We also invested R15.763 billion in BBBEE transactions and black business growth over the same period. We scored 2.4 out of 2.4 for Black SME financing, and 3 out of 3 for BBBEE transaction financing and black business growth/SME funding.


The FSC requires banks to provide affordable housing for consumers that earn a gross income between R3 500 and R23 300. Standard Bank’s Affordable Housing book is valued at around R25.6 billion. In 2019, we registered 5 667 new affordable home loans. As the largest lender in the affordable housing sector, with a 27% market share, we have almost 99  500 customers on our books.

Standard Bank offers all our affordable housing mortgage customers online or classroom-based training to help manage their home ownership obligations. Training is provided by the external service providers and funded by the bank. In 2019, 1 037 customers participated in the programme.

We work closely with the National Department of Human Settlements, National Housing Finance Corporation and the provincial housing departments to help our customers access the Finance Linked Individual Subsidy Programme (FLISP) offered by the government. The programme targets the gap market – households earning more than R3 501 but less than R22 000. These families find it hard to qualify for housing finance, as their income is regarded as too low for traditional mortgage finance from banks, but too high to qualify for the government free basic housing subsidy scheme. Qualifying households can access a FLISP subsidy, ranging between R27 960 and R121 626, depending on the applicant’s monthly income.

Despite South Africa’s tough economic conditions, 82% of our affordable housing customers are keeping up with their repayments. We are working with 7% of our customers who are showing signs of struggling to service their home loan to get back on track, providing them with alternative options that include a pause on their loan, an extension on the loan terms or a reduced repayment. In 2019, 2 861 home loans were restructured to keep families in their homes.

We do everything we can to help our customers stay in their homes. However, in 2019, we regrettably had to enter legal processes with 1.6% of our customers who were in default, after all alternative arrangements had been exhausted. During 2017 and 2018, we undertook a series of engagements with government officials, members of parliament, and civil society groups to gain a better understanding of what we, as a bank, can do to try to prevent mortgage defaults. We have since implemented various changes, including more proactive communication with stakeholders regarding the processes followed in cases of default, and the options available to customers, including loan restructuring and assisted sales. We have also increased our focus on ensuring the courts have the relevant information on steps taken to try to assist customers in distress prior to taking the matter to court.


Keeping people in their homes: the legal process we follow when clients fall behind on their mortgages
mortgages-01Throughout the collections andlegal action processes, banksallow consumers to make useor assisted sales to prevent theslow the typical SIE process downmonths.29MonthsShortfallDebtreviewEarly stageLate stageS12 9 noticea3Months6Months7MonthsSummonsbJudgementcAttachmentd9Months12Months16MonthsLegalactionSale inexecution(SIE)CollectionsSale cancelledProperty sold to third partyBank buy-in property in possession (PIP)
a. Section 129 notice is the first step in the legal process when one has defaulted on a loan repayment. It is the notice issued in terms of Section 129 of the National Credit Act (NCA), advising a consumer that they are in arrears of a certain amount in unpaid instalment(s) at a given date. A credit provider, or an attorney appointed by the credit provider, may issue notice according to Section 129 of the NCA at any time after the client has been in arrears for more than 20 business days. The credit provider may not proceed with any legal action without having fully complied with NCA requirements as contemplated in Sections 129 and 130.
b. An order to appear before a judge or magistrate.
c. Decision by the court.
d. The transfer of the property to the creditor.

We were involved in several major transactions in 2019, which increased economic participation by black people and led to the creation of new companies and jobs.

For example, we acted as sole advisor, third party lender, external preference share subscriber, equity secured funder, bookrunner on delta hedge execution and JSE sponsor for Sanlam’s transformative R8 billion BBBEE transaction which aimed to position Sanlam’s South African operations for strong growth through enhanced economic empowerment credentials. We played a key role in explaining the merits and importance of the transaction to Sanlam’s international investors to secure the requisite 75% shareholder approval. Thanks to a seamless collaboration across advisory, corporate broking, equity capital markets, debt and global markets, we were able to provide a fit-for-purpose solution that will enable Sanlam to meet its transformational objectives and create long-term value.

Sanlam is one of the first major South African insurers to achieve a Level 1 BBBEE scorecard rating in accordance with the updated Financial Services Charter. Beneficiaries of the transaction include professional black women, rural and urban black women groups, black youth and black business partners.

In 2018, SBSA advised on, structured and part-financed a deal for the South African National Taxi Council (SANTACO), which enabled SANTACO to acquire a 25% stake in SA Taxi, a subsidiary of Transaction Capital. By enabling SANTACO to access a direct stake in SA Taxi, the transaction has contributed to SME empowerment and economic transformation. SANTACO’s members are now able to expand into higher margin upstream sectors, and to benefit from deals negotiated alongside SA Taxi. In 2019, for example, SA Taxi partnered with Bridgestone tyres to offer taxi owners a R450 discount per tyre on the normal retail price. SA Taxi’s recently established parts business is providing quality and affordable second-hand parts to the taxi industry. Both deals are delivering cost savings for the industry, while helping to improve the safety and reliability of the country’s taxi industry, to the benefit of the millions of South Africans who depend on it every day.

Standard Bank’s Agribusiness Transformation Programme develops black commercial farmers and black owned agribusinesses to contribute to the transformation and economic viability of the agricultural sector in the Free State, support job creation and improve food security. Objectives include developing black sustainable commercial farmers, developing sustainable secondary agribusinesses, cultivating mutually beneficial relationships among stakeholders, strengthening agricultural training and development networks in Africa, improving academic programme and graduate employability. In 2019, we ran six training sessions in conjunction with the University of the Free State, in Bloemfontein, QwaQwa and Kroonstad.


Our supplier development (SD) programme includes a focus on access to market, access to business development and bespoke financial solutions. In 2019, we scored 3.12 out of 7 for supplier development, and an additional 2 out of 4 bonus points. Supplier beneficiary numbers have increased from 115 to about 415 in 2019.

274 suppliers participating in our supplier development programme received procurement opportunities amounting to R1.2 billion in 2019. Of these, 115 beneficiaries have received business development support, including technical support, coaching and training in various aspects of their business.

In 2019, we achieved improved alignment in our supplier development initiatives across the bank. As a result, 36% of the opportunities identified as ‘set aside’ were converted and successfully awarded to black-owned emerging micro enterprises (EME) and qualifying small enterprises (QSEs).

Supplier development also provides concessionary rates and pricing to suppliers that participate in our SD programme. The current SD loan portfolio is around R139 million, comprising business lending, VAF, home loans and commercial property finance products.

In our credit rehabilitation and recoveries (CRR) value chain, procurement from black-owned suppliers increased from 44% of total spend in 2017, to 68% in 2018, to 76% in December 2019 (with 2019’s weighted spend reported at 115%). The team proactively identifies non-performing suppliers as part of its standard supplier performance process. These suppliers are placed on probation. Any black-owned suppliers placed on probation are invited to participate in our supplier development programme and receive business development support. In 2018, 50% of the blackowned suppliers referred to the supplier development programme improved their performance and were re-instated on the credit rehabilitation and recoveries panel. During 2019, one black-owned supplier was placed on probation and invited to participate in our supplier development programme to receive business development support. Following this intervention, the supplier remains on the panel.

Black advocate representation and spending on CRR in 2019:
  • 48% representation against target of 40% and 35% spend against target of 40%
  • Representation target increased to 50% for 2020, with spend remaining at 40%.
Total CRR attorney spend versus black-owned attorney spend:
  • Year-on-year the total spend allocation in respect of black-owned firms increased from 41% in 2017 to 48% in 2018 and to 66% in 2019, exceeding our internally set 2018 and 2019 targets.

The Standard Insurance Limited (SIL) team which provides a wide range of short-term insurance solutions, is committed to using locally-based, black-owned enterprises to service customer claims. We onboarded a number of new qualifying black-owned service providers to service SIL claims. In 2019, 99% of our spending (amounting to over R1 billion) was on Level 1–4 service providers, of which 67% were black-owned businesses (R671.2 million) and 22% were black women-owned businesses (R225.7 million).

The SIL supply chain management team visited small black-owned service providers in metro areas around the country to provide information and support. We’ll will expand our visits to non-metro areas in 2020. We also held regular sessions with industry associations to support the development of their black-owned member companies. And we’re a signatory to the SAIA Interim Measures Agreement, which aims to increase participation of black-owned panel beaters. We continue to work with the enterprise and supplier development team to identify and address specific developmental areas within newly onboarded businesses, to help improve operational efficiencies and grow their businesses.

In the motor and non-motor space*, we’re developing specific criteria to support local black-owned enterprises. Only 1% of current spend is allocated to non-compliant BBBEE suppliers. This is due to the specific customer demands in outlying areas where qualifying candidates may not be available.

* Refers to monies spent on repairing insured motor vehicles (motor space), and spend on repairing damage to buildings and/or the replacement of lost or damaged personal items insured on the policy (non-motor space).

We aim to make funding more accessible to small black owned businesses. We scored 3 out of 3 on the scorecard for enterprise development. Our focus is on sustainable business growth. We spent R41.17 million on Enterprise Development initiatives in 2019, creating 1 054 jobs and benefitted 488 entrepreneurs and small business owners.

  • Solar Rais – renewable energy, Value of investment: R680 000
  • Ivili Loboya – agriculture, Value of investment: R1.5 million
  • Contractor development programme – construction, Value of investment: R1 394 000
  • Limpopo Travel Company Solution – travel, Value of investment: R 1 493 000
  • Massbuild-Tusk Solution – construction applications approved: 21 Value of facilities granted: R30.2 million Jobs created: 843
  • Limpopo Government Solution – multi-industry applications approved: 127 Value of facilities granted: R8.4 million Jobs created: 110
  • Business in a Box (Coca-Cola programme) – retail and wholesale Value of investment: R3.5 million startup capital Number of business assisted: 50
  • Women in ICT – technology, Value of investment: R400 000
    In partnership with the Department of Telecommunications and Postal Services
    Company-owners compete to win development and funding support and access to international and local markets (annual competition)
    The winner, Simangele Mphahlele’s Ejoobi, was awarded business development support to the value of R300 000 Ejoobi’s mission is to enable organisations to connect to hard-to-reach job seekers through customized USSD and SMS campaigns.
  • ITU Industry 4.0 Challenge – technology, Value of investment: R3 million
    In partnership with the Department of Telecommunications and Postal Services
    Sponsored six ICT businesses to attend ITU Telecom World, an annual event which brings together digital start-ups and SMEs, governments, regulators, industry leaders and experts from around the world
    Committed R200 000 per business for post-event development
  • WalletWise for Business consumer education programme – multi-industry, Value of investment: R3.5 million
    Training programmes in Durban, Khayelitsha, Polokwane and Welkom
    120 business owners successfully completed the programme
    Three months of classroom-based training, Microsoft Office training, mentoring sessions
    Pitching sessions
    34 winners, each awarded an amount between R10 000 and R80 000, to a total of R1 million, provided in the form of grant funding by Standard Bank
    Winners used the money for equipment, working capital, training or professional services for their businesses
    Many participants indicated that the course had changed the way they approach their businesses, and that the experience of pitching their businesses made them feel more confident about approaching potential funders in the future

One of the main areas in which ED supports small businesses, is by making funding more affordable. Over R11 million was spent in 2019 on working capital and equipment funding to help support small businesses become operational. This funding support additionally helped maintain existing jobs, as well as create over 120 new sustainable jobs. Some of these businesses supported include:

  • Ivili Loboya, Africa’s first cashmere fabric manufacturer, was established in 2015 as a wool processing hub in Ibika. Ivili was founded by Dr Vuyo Mahlati and is built on a value chain approach that recognises communal farmers, most of whom are women, together with other suppliers, including commercial farmers and wool agents. We continue to support this black-female owned business across the value chain.
  • Vinnie’s Grill, food and beverage, a first of its kind restaurant in Mthata, Eastern Cape. We financed the final kitchen equipment and helped grow the company’s turnover by 400% within six months.
  • Little Beaker, a distributor of Liquified Petroleum Gas, identified an opportunity in the community as the sole distributor within a 100km radius. The owner invested his life savings on getting the infrastructure set up and licensing. With one additional investment, the business grew in revenue by 200% within four months.

Other investments include the technology, professional services, agriculture, construction, renewable energy, food and beverage, retail, travel management and fashion design sectors.

Over R14 million was invested in 2019 to support small businesses to access funding, through leading with development initiatives. This included a number of investment programmes, alongside industry exposure events. We worked with developmental support agencies, and made capital available to support post development operations. Initiatives included:

  • The Women in ICT Programme, in partnership with the Department of Telecommunications and Postal Services (DTPS). The winner of this programme, Simangele Mphahlele’s Ejoobi, was awarded business development support to the value of R300 000 from Standard Bank. Ejoobi’s mission is to enable organisations to connect to hard-to-reach job seekers through customised USSD and SMS campaigns.
  • ITU Industry 4.0 Challenge, again in partnership with the DTPS, supported six ICT businesses to attend ITU Telecom World in Budapest, an annual event which brings together digital start-ups and SMEs, governments, regulators, industry leaders and experts from around the world. These businesses further received developmental support preparing them both for the international and local markets.
  • Business in a Box initiative: partnering with Coca-Cola Beverages South Africa, 30 retail businesses have been set up in Merafong, servicing and supporting their local communities. These businesses will have the opportunity to receive investment to become self-sustainable and growing retail entities, with an expanded product line and service offering.
  • Other initiatives included the BMF Innovators and Inventors Programme, the Tshwane Youth Idea Validation, the Grain Agriculture development and fund support, Accounting Services and other business development support for numerous small businesses nationwide.

We offer solutions to support small businesses that have purchase orders or contracts to access funding and accessible interest rates. Examples include:

  • Construction contractors loans for working capital and materials, along with development support through professional services company Tusk. Over R68 million was dispersed in 2019, with 0 losses. 843 jobs were created.
  • Working with Limpopo and Mpumalanga provincial governments, we dispersed over R24 million to suppliers with valid purchase orders.
  • Early stage travel management companies were supported in collaboration with Diner’s Card, providing working capital for these emerging players in the tourism industry.
  • A rehabilitation fund was established and dispersed more than R18 million in interest-free loans to financially rehabilitate businesses with judgements against them, but with valid contracts in place. These efforts have resulted in multiple businesses re-entering the formal banking market and able to access funding.