Nedbank has unveiled the R10-million Indalo Fund during the Indalo Inclusive Symposium at the Council for Scientific and Industrial Research. This fund aims to transform entrepreneurial funding, creating a robust pipeline of businesses poised for significant investment.
The Indalo Fund is an evolution of the successful partnership between Indalo Inclusive and Nedbank, which has already fostered the creation of 215 enterprises with an average income of R5,933,283 each. Many of these enterprises are now ready to attract larger investments from commercial lenders, facilitating significant scaling opportunities.
The launch of the Indalo Fund aligns with Nedbank’s commitment to fostering a green economy that supports the United Nations Sustainable Development Goals. Building on three years of experience, the bank has decided to enhance its funding model in the final phase by introducing incentive and performance-based grants.
This innovative approach allows Nedbank to support more enterprises with the same capital while validating these businesses as investment-worthy. The Indalopreneur programme, which comprises four phases, now incorporates the Indalo Fund in its final stage, Indaloaccel, for enterprises with proven successful business models.
In the new funding structure, enterprises receive 50% of the R250,000 Indaloaccel grant upfront if they commit to creating at least five full-time jobs at the minimum wage and meet specific environmental, social, and economic impact targets. If they exceed their targets by 100% within 12 months, they receive the remaining 50% of the grant. Enterprises achieving only 50% above the job creation target receive half of the remaining grant.
This performance-linked funding model prepares enterprises to grow beyond grant dependence and compete for investor funding, which seeks returns. Additionally, it allows Nedbank to recycle part of the committed capital, potentially reaching an extra eight enterprises and amplifying the overall impact of the funding.
The first phase of the Indalo Fund will run for 18 months, during which the entire R10-million will be disbursed. Some of this capital will be recoverable, and the fund will require recapitalization to run for an additional 36 months. At the end of this five-year period, Nedbank and Indalo Inclusive will conduct a comprehensive impact assessment.
In 2021, Nedbank dedicated 80% of its corporate social investment (CSI) budget to projects that integrate environmental sustainability with the country’s critical economic growth needs. This Green Economy CSI Strategy aims to develop a collaborative ecosystem focused on sustainable economic growth, particularly empowering rural and semi-urban communities.
The Indalopreneur Programme is central to this strategy, linking job creation and inclusive economic growth with the development of environmentally friendly businesses. These enterprises are identified and mentored through the programme’s four phases via the South African Green and Inclusive Enterprise Awards and Support Programme.
