Social Issue

South Africa is a reasonably developed country, with a per capita GDP of 13,225 USD (World Bank, PPP 2016), but it has one of the highest levels of inequality in the world. Furthermore, the country has a very high unemployment rate, especially in rural areas. It is thought that, in rural areas, more than 40% of the population lives on less than 2 USD per day.  Many people create small businesses to survive, but there are few financing opportunities for small businesses.

Our Response

The Small Enterprise Foundation (SEF) is a non-profit entity, founded in 1991, whose mission is to combat extreme poverty. Although South Africa is a country with medium-high income, Apartheid has caused extreme inequality; in the province of Limpopo, where SEF has its operations, 60% of the population live below the country’s poverty line. SEF has more than 171,000 clients, of whom more than 99% are women.

SEF provides credit for self-employment, combined with the mobilisation of savings and a methodology which substantially increases the possibility of their clients’ self-employed activities being successful.

SEF follows the group-solidarity loan approach, very similar to the Grameen Bank of Bangladesh, which helps the poorest members of the community. To identify individuals in need of help, it uses its own tool, the Participatory Wealth Ranking; this determines who the poorest and most vulnerable members of a community are.

Expected Social Impact

With this investment of the Netri Foundation, it is estimated that SEF will be able to provide 20,000 microloans in the country, with the idea of empowering the South African population in generating employment in rural areas.