Women and the BEE-Act
Support for Women Entrepreneurs: BEE and Funding.
The women of South Africa have made great strides in their bid for equality.
At the centre of every Women's Month celebrated in August, lies one pivotal question: “Are we there yet?” The word “there” in the question refers to a place where women are afforded the same opportunities as their male counterparts. There was a time when women could not follow certain professions and it was unusual to hear of a woman owning her own business. The march conducted by women on 9 August 1956 opened South Africa's eyes to the abilities, strengths and creativities of women.
Women now have equal rights as men and the Constitution provides that no one may be discriminated against on the basis of their gender. Besides this, there is now additional support for women in the professional and/or entrepreneurial sector that come in different forms. This article will focus on the advantages introduced by the Broad-Based Black Economic Empowerment Act 53 of 2003 (“BEE-Act”) and some of the funding platforms provided by government structures.
The BEE-Act and the impact on women
The objective of the BEE-Act is to encourage the appointment of black people into leadership roles in the workplace and ownership of businesses by black people. It is specifically stated with regard to women that the BEE-Act is aimed at “increasing the extent to which black women own and manage existing and new enterprises, and increasing their access to economic activities, infrastructure and skills training.”
The mechanisms in place to give effect to the BEE-Act are set out in the Codes of Good Practice on Broad-Based Black Economic Empowerment (“Codes”). In terms of the Codes, enterprises are awarded in terms of a scorecard system based on the percentage of ownership or management in the hands of black people, as well as black women. The higher the percentage of shares owned by black people, and more particularly black women, the higher the enterprise's scorecard. This also applies to enterprises with women in managerial positions.
The application of the scorecard comes into effect when looking at an enterprise's procurement and other economic activity. For example, the Codes provide that enterprises are given preference in endeavours in line with their scorecard. This means that if the State advertises a tender, a company with 50% shareholding in the hands of black women may be preferred over a company in which black women only have 20% shareholding (other terms and conditions, such as experience, may be indicated on the tender document).
The BEE-Act has incentivised the appointment of black women into leadership positions and it has also encouraged them to venture into entrepreneurship. Nowadays, there are numerous female owned enterprises ranging in size. It was reported that by 2022, women owned enterprises created about 972 000 jobs. Furthermore, in 2021, South Africa ranked 44th amongst other countries on the Women Business Owner benchmark. This shows that women entrepreneurs are making a significant contribution to the country's economy.
Financial support for women owned enterprises
Although advantages have been made in the field of business for women, a lack of resources may hamper them from meaningful participation as they may struggle to provide services due to financial constraints. The implementation of the BEE-Act has also led to other initiatives that cater for the meaningful implementations of its objectives, such as providing access to funding for women entrepreneurs.
The National Empowerment Fund (“NEF”), which identifies itself as a catalyst for Broad-Based Black Empowerment, has a wing called the NEF Women Empowerment Fund (“Fund”). This Fund assists with financial funding for enterprises owned by black women. One of the requirements for funding is that the minimum black women shareholding in the enterprise must be 51%. If successful in the application for funding, the funding can range from R250 000 to R75 million (depending on the circumstances) to be used to start or expand an enterprise. A wide variety of enterprises are funded, for example, manufacturing beauty/hygiene products, farming, acquiring franchises, textile, construction and accommodation facilities.
The application form for funding, as well as further details regarding the Fund, can be obtained on the Fund's website at www.nefcorp.co.za.
Conclusion
It is clear that the women of South Africa have made great strides in their bid for equality over the years. Their impact on securing the financial future of the country is undeniable. As we celebrate Women's Month, we also celebrate every woman entrepreneur and stay in hope that with the encouragement offered by the different laws and funding programs, more developments and advancements will emerge.
Did you know…In 2022, women owned enterprises created about 972 000 jobs in South Africa.