Twenty applications under the Tourism Equity Fund (TEF) amounting to R301 million have been approved, Tourism Minister Patricia de Lille said on Sunday.
“So far, only 20 applications from businesses have been approved under the TEF. These approved applications amount to R301million,” the Minister said in an update on the progress of applications for the fund.
Applications for the TEF opened in November 2023.
READ | Tourism announces opening of application process for TEF
The TEF is an initiative by the Department of Tourism to provide financial support to tourism enterprises and to transform the sector.
“The relaunch of the R1.2billion TEF in 2023 and the subsequent application process opening in November 2023, saw a high level of interest from businesses applying to the TEF for funding. The revised TEF is being implemented in line with existing legislation,” said the department.
In the update, the department said KwaZulu-Natal leads in both submissions and approvals, recording five approvals, followed by approvals for businesses in Gauteng, the Eastern Cape, Limpopo, the Western Cape and the Free State.
Two of the approved applications were for new businesses and 18 were for expansion of existing businesses.
The R1.2 billion fund is managed by the Small Enterprise Finance Agency (SEFA) on behalf of the Department of Tourism and follows a blended finance approach to provide a combination of debt and grant financing to facilitate equity acquisition and new project development in the tourism sector by black entrepreneurs.
The Minister expressed concern with the pace of the administration of the fund.
“The administration of this fund and application processing has been too slow and despite all SEFA has done to improve on the management of the TEF, efforts which I had impressed on SEFA to work hard on, I remain seriously concerned about the speed at which decisions are taken on TEF applications and the rate at which SEFA disburses funds to the approved applicants.
“The more delays tourism businesses face in accessing finance, the more we are not achieving transformation and the creation of the much-needed jobs in the tourism sector.”
Under the Fund Management Agreement between the Department of Tourism and SEFA, the TEF aims to:
- Increase growth, transformation and stimulate more inclusive participation in the tourism sector in line with the targets for the Tourism B-BEE Sector Codes and
- Address funding obstacles faced by enterprises in the tourism sector.
“The first year of the application adjudication process was painfully slow and a number of interventions were made to enhance the administration of the TEF by SEFA,” Minister de Lille said.
This as SEFA has reported that it is expanding outreach activities by hosting webinars to provide step-by-step guidance to help applicants navigate the TEF application process to improve their chances of success.
“I am appealing to SEFA to continue putting more meaningful work and effort into ensuring that applicants access the TEF urgently, and as agreed with them, to be diligent in discharging their responsibilities in managing the TEF.”
The Minister further apologised to the “tourism sector for the poor performance of the application adjudication process.” -SAnews.gov.za
