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EMPOWERING CO-OPERATIVES 

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The main focus of the fund is to promote the viability of primary co-operatives located and operating in the Eastern Cape as well as enterprising individuals or business enterprises who are members of a primary co-operative. The individual or business enterprise must undertake business activities that are aligned with the core business of the parent co-operative whether or not the co-operative is funded by ECDC. 

 

Imvaba Co-operative Fund is an incentive and institutional building support offered to co-operatives in order to: 

• Mainstream Co-operative enterprising activities including those of participating
   enterprises/individuals in the economy of the Eastern Cape;
• Enhance self-employment opportunities in the province;
• Contribute to poverty relief efforts through enterprise development.

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The economic sectors prioritised are guided by the Provincial Economic Development Strategy and relevant sector development plans and include:

• Agriculture and Agro-processing
• Retail (linked to the priority growing economic sector);
• Services
• Manufacturing (timber industry, textiles, chemicals, automotive activities,
   metal processing);
• Tourism activities (Setting up a B&B, shuttle service, entertainment centres,
   accommodation establishment and tourism adventure) ;
• Creative Industry (arts, crafts, etc.);
• ICT and Film Production;
• Green Economy (bio-fuels, renewable energy, etc)
• Business Process Outsourcing (telecoms, etc)
• Textiles and Craft (job creation and protection)
• Oceans Economy

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Targeted Co-operative Enterprises

 

In line with the socio-economic challenges of the province (poverty and unemployment), the types of co-operatives targeted by the Imvaba Co-operatives Fund are Primary Co-operatives (as defined under Section 4(2) of the Co-operatives
Act of 2013).

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Imvaba Co-operative Incentive Product Mix

 

A co-operative or participating enterprise/individual approved for funding qualifies for the following services under Imvaba Co-operative Fund:

 

1. Funding for Equipment and Material (Incentive):

 

• Purpose: Financing equipment and material needs of co-operatives and participating enterprises/individuals, in line with the             business requirements of the co-operative or participating enterprises/individuals

• Terms: Non-repayable, paid directly to suppliers on behalf of co-operatives or participating enterprises/individuals

• Amount: Maximum of R600 000 for co-operatives and R150 000 for participating enterprises/individuals

Within the first 12 months of acquiring the assets, ECDC shall be entitled to recall the donation, or transfer the donation to another beneficiary, should the beneficiary breach the conditions of the contractual agreement between themselves and ECDC. During this initial 12-month period, the ownership of assets, valued above R30 000, shall vest with beneficiary with ECDC entitlement for recalling the donation expiring after 12 months. Assets below R30 000 will immediately vest with the beneficiary. Repeat funding: Will be considered as new application after previous funding period of five (5) years has expired.

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2. ECDC support to sectors:

• Purpose: To augment any skills development support, provision of discussion or information sharing platform and collation of critical information in support of primary co-operatives and participating enterprises/individuals

• Terms: Non-repayable, paid directly to suppliers on behalf of co-operatives or participating enterprises/individuals

• Objective: Enhance skills, knowledge and product quality for better market access

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Qualifying Criteria

A co-operative wishing to apply for the Imvaba Co-operative Fund will need to comply with the following criteria:

• The co-operative must be registered at Companies Intellectual Property Commission (CIPC) under the Co-operatives Act No.14 of 2005 (as amended with Act 6 of 2013)
• The Registration Certificate of the co-operative must be signed by the Registrar of co-operatives or any other Official of the Office of
the Registrar officially delegated to doing so
• The co-operative must have a signed resolution by all the members that they should apply for the Imvaba Co-operative Fund. Such a resolution must also explicitly provide names of designated members to conclude all the relevant documentation in respect of Imvaba Co-operative Fund
• The co-operative must have in place a Constitution, in line with the provisions of the Co-operatives Act (as amended)
• A completed application form, a business plan where necessary, or a funding request must be submitted with other ECDC prescribed documents
• The co-operative should have secured a market for their product or service, this should be shown through letters of intent or off-take agreements
• The co-operative should have secured quotations from different suppliers in relation to the equipment and material it requires
• The co-operative should have secured a lease, or other legal binding document from the owner or a letter signed by the owner of the building and/or land from which the business of the co-operative will be operating from
• The establishment of the co-operative must comply with the requirements of The Co-operatives Amendment Act 6 of 2013 in all respects
• Members of the co-operative must be willing to make themselves available to workshops and training to be provided through the Institutional and Capacity Building Programme of the fund
• The co-operative must have basic financial records in place (bank account, cash book, etc.)
• The Co-operative must comply with any other applicable requirements in the
environment of operations e.g. water rights, General Agriculture Practices (GAP) certification, Hazzard Analysis Critical Control Point (HACCP), etc

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In the case of application by an enterprising individuals or business enterprises that are part of co-operatives, the following documentation will be required:

• Written evidence of membership in a primary co-operative whose core business is aligned with business activities of the applicant or co-operative registration certificate or CSD report
• Lease agreement or relevant document where it is applicable or a simple letter signed by the owner of the building and/or land from which the business of the co-operative will be operating from
• Certified ID in the case of an individual and/or registration certificate in case of a juristic person
• Proof of address
• Proof of bank account
• A completed application form, a business plan where necessary, or simple a funding request must be submitted with other ECDC prescribed documents
• Evidence that the parent co-operative is active and operational at the time of the application

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Non-Qualifying Criteria

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The Imvaba Co-operative Fund will not finance co-operatives and/or participating enterprises/individuals activities that relate to the following:

• Activities involving gambling, drugs or alcohol sale
• Costs associated with preparing and submitting tender documents
• Any development investment which might be offensive to the community directly affected by such co-operatives and/or participating
enterprises/individual business activity
• Any co-operative and/or participating enterprises/individuals whose activities might be offensive to the community at large
• Any co-operative and/or participating enterprises/individuals which might seek finance in the form of a loan to finance an acquisition of shares from another company
• Co-operative and/or participating enterprises/individuals which might seek finance with the purpose to acquire property (land and buildings), of which the property will be receiving its income from lease rentals only and the loan proceeds will be used for the acquisition of the property only
• A co-operative and/or participating enterprises/individuals whose members are not going to be directly involved in the daily activities of the co-operative and also not be able to create jobs for either members or non-members
• The member(s) of the Co-operative and/or participating enterprises/individuals who holds existing accounts with ECDC (including rental accounts) must not be in default.

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The ECDC commits to funding co-operatives and/or participating enterprises/individuals that show the following significant development impact indicators:

• Potential for sustainability
• Positive contribution to local economy
• Job creation/retention potential
• Empowerment of women, youth, people living with disabilities and military veterans
• Largely based in rural areas
• Community development

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Requirements from Applicants

Over and above the eligibility criteria listed above, the following will also be relevant:
• Members of the co-operative and/or participating enterprises/individuals must demonstrate commitment to the activities of the co-operative
• It is a requirement of ECDC that the majority of the members of the cooperative must be actively involved in the activities of the co-operative. Active involvement requires participation by members in the activities of the cooperative
• Members of the co-operative must display some technical expertise in the activities of the proposed business, should this not be the case, the members should make themselves available to support through the Technical Skills Training
• Co-operatives or its individual members and/or participating enterprises/individuals with outstanding loans or debts with the ECDC shall not obtain funding until they settle their debts or enter into settlements arrangements with ECDC.

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For more information, contact:

Name: Simphiwe Ntshweni

Email Address: sntshweni@ecdc.co.za

Contact No: 043 704 5619 / 083 410 2166

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