Johannesburg - PROMINENT businesswoman Khanyi Dhlomo has paid back the R34.1 million loan granted to her company, Ndalo Luxury Ventures (NLV), by The National Empowerment Fund.
The loan granted to her by the NEF came under serious scrutiny when it became public, prompting critics, including the Economic Freedom Fighters, to demand that she pay back the money.
And now she has.
The NEF confirmed this week that NLV had settled its entire debt, which was used to establish the Joburg luxury boutique Luminance.
According to the organisation, they started paying off the loan from June last year, and had up to five years to pay up.
“One of the milestones that the NEF is pleased about is the fact that Ndalo Luxury Ventures (NLV), a black-woman-owned start-up business trading as Luminance, has settled its loan obligations in full.
“The NEF Board Investment Committee approved the transaction in August 2012, and the NEF advanced a R34.1m loan to NLV, on strict commercial terms. NLV began repaying the NEF loan in June 2013, essentially because it is a viable business, and has now settled its loan obligations in full,” said NEF spokesman Moemise Motsepe.
According to Motsepe, Ndalo’s application for the funding was initially declined after also being declined by the country’s four major banks because “they reportedly do not have a high-risk appetite for start-ups”.
“The NEF originally turned down the application because we wanted to see greater localisation and rural development, among other strategic objectives.
“This resulted in, among other things, increased shareholding for rural women from the original 2 percent to the current 10 percent, and the active creation of access to international markets for locally produced labels, arts and crafts,” said Motsepe.
Trade and Industry Minister Rob Davies also endorsed the funding of NLV following the media attention it attracted, but said the transaction had highlighted the need for the department to re-emphasise some important objectives for development finance institutions.
These included that government funds may not be used to support the importation of finished goods and services, and that, where local suppliers did not exist, the agency must obtain the concurrence of the department’s accounting officer and executive authority to deviate from the directive.
Agencies were also urged to make every effort to find local suppliers of finished, intermediate and capital goods.
Despite being rejected at first by some opposition parties, the deal was given the nod after a presentation by the NEF to the portfolio committee on trade and industry.