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samaf is an initiative of the Department of Trade and Industry which was set up to provide wholesale microfinance services to the rural poor across. We provide microfinance to samaf funded financial intermediaries such as Financial Services Cooperatives (FSC’s) and Microfinance Institutions (MFI’s) who on-lend to their members and clients respectively. Therefore, anyone who wants to obtain a loan should first join an FSC or apply to the MFI for a loan.
Loans
There are two types of loans that we offer to the financial intermediaries. These are the Micro-enterprise and development loans.
The Micro-enterprise loan is offered to the financial intermediaries who on-lend to the poor people to establish and grow their micro survivalist businesses. To qualify, one must earn not more that R3 500 per month.
On the other hand, Development loans are aimed at FSC’s and MFI’s for on-lending to clients (household earning R1 500 and below per month. Clients can use development loan for paying school fees, medical fees and improvements to the household.
Capacity Building Incentive
samaf provides capacity building incentive to FSC’s and MFI’s to build their institutional capacity to ensure that requisite skills, systems and infrastructure is in place for them to operate effectively.
§ Capacity building is subdivided into the following elements.
- Training funds:
This is aimed at providing training and skills improvement to the Board;
Management and staff of the FSC’s and MFI’s to assist in managing the
loan portfolio effectively and efficiently. Training is provided in areas such
as cooperate governance, financial management and loan delinquency
management.
- Working Capital:
Qualifying financial intermediaries would also receive once off working capital. This is aimed at assisting institutions to purchase items such as office furnisher, computers and other essential items to improve appearance of institutions.
Operational Cost
We subsidise the operational costs to the FI’s in order to help them cover some of their establishment costs and to promote their sustainability. This subsidy should also help the institutions which are still struggling after set up before they reach break-even point and sustainability.
Management Information System
The MIS fund is aimed at helping and supporting the institutions to acquire modern MIS to provide accurate and reliable information. This is very critical to ensure that amongst others correct profile of each client and performance of their loans is kept and used as a monitoring tool by the intermediary.
Savings Mobilisation
This product is aimed at assisting and supporting the intermediaries to grow their savings book for on-lending activities. This is also the contribution to the government’s objective of promoting a culture of savings amongst South Africans.
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