The Department of Tourism is inviting applications from all black-owned tourism businesses for the Tourism Transformation Fund (TTF).
Together with the National Empower Fund (NEF), the department intends to give financial assistance to these businesses via the fund.
“The TTF aims to drive transformation in the tourism sector in a more direct and impactful manner that will not only assist black-owned tourism enterprises to expand and grow, but also to catalyse the rise of a new generation of black-owned tourism enterprises to propel the tourism sector to greater heights.
“The TTF provides a combination of grant funding, debt financing and equity contributions to facilitate capital investment in the tourism sector by black entrepreneurs. The grant funding portion is used to reduce the approved loan finance and/or equity contribution by the NEF, where commercial viability of the tourism project has been established,” the department said.
The fund will also provide post-investment assistance to businesses through the NEF and the department.
Existing and new black-owned businesses are eligible for funding provided they meet the following criteria:
- The firm must directly serve tourists as its clients.
- According to NEF financing requirements and due diligence, the project must demonstrate economic viability and sustainability.
- The business must be majority (51%) owned by black people.
- The firm must be governed by black management.
- Shareholders must be actively engaged in corporate operations.
- The business must be registered in South Africa as a legal entity in accordance with South African legislation.
- According to the Amended Tourism Broad-Based Black Economic Empowerment (B-BBEE) Sector Code, the firm must be either a black-owned Exempted Micro Enterprise (EME) or black-owned Qualifying Small Enterprise (QSE).
“The department’s grant contribution for approved applications is limited to 50% of the total loan finance and/or equity contribution approved by the NEF and is capped at a maximum of R5 million per beneficiary.
“Co-financing tourism transactions between the NEF and/or other accredited Development Finance Institutions is allowed under the Fund. Any such arrangement needs to be agreed to by the NEF,” the department said.