John Warlock
In 2025, SEFA (Small Enterprise Finance Agency)—fully merging Khula Enterprise Finance Ltd and the South African Micro‑Finance Apex Fund (SAMAF)—is delivering targeted financial support to small businesses.
With flexible loans, credit guarantees, and capacity-building, SEFA empowers underserved entrepreneurs across the country.
Policy Goals & Strategic Framework
- SEFA consolidates Khula, SAMAF, and the IDC’s small-business operations to provide affordable financing and support to micro, small, and medium enterprises (MSMEs), including cooperatives.
- The 2025 MSME & Cooperatives Funding Policy mandates coordinated funding delivery across government agencies to close credit gaps.
- SEFA programs target job creation, poverty alleviation, and support for township, rural, youth, veteran, and disability-owned enterprises.
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What SEFA’s Programs Offer in 2025
Khula Legacy: Access via Intermediaries
- Khula historically offered credit guarantees and seed finance via commercial banks and retail financial intermediaries (RFIs) in underserved communities.
- It aimed to support micro-businesses through products like micro-credit, capacity building, and savings mobilization funds via partners.
SAMAF Legacy: Community Micro-Finance
- SAMAF offered three core products: Micro-Credit Fund (small loans), Capacity Building Fund, and Savings Mobilisation Fund, deployed through community institutions.
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SEFA’s 2025 Integrated Financing Model
- Direct Retail Lending: loans from R500,000 up to R15 million for working capital, asset and term finance.
- Wholesale Lending: guarantees for banks to lend to SMEs, wholesale micro-business loans, bridging funding, and revolving credit.
Additionally, SEFA integrates veteran-focused grants (Inyamazane), disability-support pathways (Amavulandlela), and supplier development (Godisa Fund).
Product Features
| Product/Programme | Target Entrepreneurs | Loan Range / Support | Key Purpose |
|---|---|---|---|
| Direct Lending | Start‑ups, MSMEs, Cooperatives | R500k – R15M | Working capital, equipment, expansion loans |
| Wholesale Lending / Guarantees | Banks serving MSMEs | Guarantees, term/bridging loans | Unlock private sector credit for small businesses |
| Micro-Credit & Savings Funds | Micro-entrepreneurs via RFIs | ≤ R10k–R250k | Seed credit, savings structures, community reach |
| Special Funds (Disability / Veterans / Supplier) | Inclusive micro- & small-enterprises | Up to R1M | Targeted empowerment and procurement readiness |
How to Apply & Eligibility
Eligibility Criteria
- Businesses must be less than R75M turnover, with most retail-level loans up to R15M.
- Micro-enterprises (<R250k turnover) and township-based entrepreneurs are especially eligible.
- Applicants must provide financial records, business plans, tax compliance certificates, and acceptable collateral.
- Priority sectors: manufacturing, agriculture, services, green industries, construction, and technology.
Step‑by‑Step Application
- Diagnose business needs and eligibility via SEFA/RFI.
- Prepare documentation: business registration, tax clearance, management details, and financial statements.
- Apply directly for retail products via SEFA offices or approved fintech intermediaries—or seek help from incubators or Seda regional branches.
- For wholesale lending, eligible intermediaries (micro-lenders or banks) apply through SEFA support channels.
- Expect decision and disbursement within 6–8 weeks, accompanied by training and support services.
Why SEFA Financing Matters in 2025
- Reports reveal that 39% of funding needs are for loans <R250k, and over 50% are for equipment, expansion, or cashflow—areas SEFA targets.
- SEFA helps bridge gaps left by banks’ restrictive credit models—especially for township, rural, and informal sector MSMEs.
- Backed by IDC’s risk capacity, SEFA improves access to finance while offering non-financial assistance like mentoring.
- The initiative aligns with the National MSME & Cooperatives Funding Policy to support inclusive growth.
Considerations & Risks
- Application complexity may discourage micro and informal businesses; assistance hubs (Seda or fintech partners) help bridge these gaps.
- SEFA must expand its branch network and digital application channels to reach rural markets effectively.
- Prudent risk management is required to limit default risk, especially in unsecured micro-lending.
- Ongoing data-sharing, open finance, and credit scoring reforms remain pivotal to scaling financing access.
In 2025, SEFA—integrating Khula and SAMAF—is central to South Africa’s enterprise finance ecosystem. With retail and wholesale loans, credit guarantees, and targeted capacity support, it offers small enterprises inclusive access to funding.
Entrepreneurs should assess eligibility, prepare documentation, and connect with SEFA or intermediaries for timely financial support.
Frequently Asked Questions
1. Can micro-businesses access SEFA loans under R250k?
Yes. SEFA’s micro-credit channels (via intermediaries or SAMAF legacy partners) offer small loans starting at a few thousand rands for township and rural entrepreneurs.
2. What can SEFA’s retail loans be used for?
Retail products include working capital, asset financing (machinery, vehicles), bridging, revolving, and expansion finance up to R15 million.
3. How quickly is funding granted once approved?
Once approved via SEFA’s retail channels, finance is typically disbursed within 6–8 weeks, accompanied by business support and training.