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Free State Development Corporation

Informal Sector Fund

Objectives

  • Alleviating unemployment through micro-enterprise initiatives
  • Financing of businesses, which are at formation stages
  • Targeting the informal sector and small start-up businesses
  • To assist unemployed and preferably people with technical skills to start micro manufacturing businesses.

Financing Policy

Loan Size

  • Based on capital needs, a minimum of R5 000 and not exceeding R50 000 per investment.

Exclusions

  • Purchase of shares from existing businesses
  • Debt financing
  • Guarantees
  • Non income generating assets
  • Property Development
  • Financing of Vehicles/Automobiles for private use is explicitly excluded

Loan Repayment terms

  • Loans for stock and equipment: 60 to 72 months maximum

Interest Rate (Fixed)

  • The interest rate charged will be based on the prevailing prime rate plus 1%.

Grace Period

  • The grace period will depend on the nature of a project, which in the case of a new business shall not exceed three months from date of the first disbursement.
  • The interest charged during the grace period shall be capitalized.
  • In case of an existing business the grace period may not exceed one month from date of the first disbursement.

Own Contribution

  • No equity contribution shall be required for this loan product.

Securities

  • A 100% security cover is desirable; however, a minimum cover of 60% will be considered depending on the product and capital required. Viability and risk of the venture will also be considered for the purpose of determining the security cover.

Fees
The following fees and costs shall be payable by all applicants:

  • No initiation fees are required for this loan product.
  • Security registration costs shall be borne by the client and may be capitalised.

Insurance

  • The borrower is covered by the FDC group scheme. The premium will be included in the monthly instalment.
  • The borrower has an option to cede own life cover insurance policy
  • The borrower must cede comprehensive short-term business insurance to the FDC.

FDC Head Office

33 Kellner Street
Bloemfontein

Tel: 051 4000 800
Email: info@fdc.co.za

Fast Facts

  • Capital: Bloemfontein
  • Languages: 64.4% Sesotho
    Languages: 11.9% Afrikaans, 9.1% isiXhosa
  • Population density: 23 people per km²
  • Area 129, 480 km²
  • Share of total SA area 10.6%

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