Frequently Asked Questions
How does the MDF operate?
- The MDF does not employ staff or pay director salaries. Instead, it has adopted global best practice by appointing a dedicated and competent service provider to 1) administer the MDF and 2) facilitate enterprise & supplier development projects with participating corporates and SMEs
- The Memorandum of Incorporation (MOI) of the MDF mandates the following objective: to identify and develop high potential SMEs as strategic suppliers to leading industrial corporates through market access, standards upgrading and capital investment interventions, aligned to B-BBEE codes of good practice
- The Directors of the MDF fulfill governance oversight, fiduciary, and compliance requirements, to achieve the MOI objective. The MDF Directorate are the final decision makers for which beneficiaries receive grants and/or loans, however this is done with extensive consultation and collaboration with Donors who are ultimately the ones who enable the support to beneficiaries through their contributions
How are grant donations and loans used?
- Grants are used to fund Enterprise and Supplier Development (ESD) projects with beneficiaries. High potential businesses can be identified and proposed by participating donors to be beneficiaries, or the MDF can assist with finding high potential SMEs aligned to the needs of donors
- Loans are typically used to unlock an identified opportunity with a beneficiary, to be agreed by all parties involved. Use cases vary from supporting working capital needs, to purchasing specific capital to improve the business offering, or similar. Beneficiary loan terms are agreed on a case-by-case basis based on the project, MDF, and donor needs
- Loans, from the Donor to the MDF and from the MDF to the beneficiary, are always unsecured and non-interest bearing to ensure maximum B-BBEE points recognition
- Beneficiary loan capital can be disbursed to the beneficiary in full (all at once) or in milestone-based portions, depending on the developmental project needs, B-BBEE compliance requirements, and risk appetite of the donor
- Interest earned on loan capital (where applicable) is used to bolster ESD projects with the identified beneficiaries
How are points secured in the B-BBEE audit?
- The MDF annually secures SED and ED Certificates based on the work it does and how the MDF is designed. These certificates confirm the following requirements for donor B-BBEE audits:
- % Black Beneficiary Base
- % of the donations which accrue to Black Beneficiaries and,
- the MDF is a qualified and suitable facilitator for Enterprise and Supplier Development donations
- The evidence packs provided, are therefore as follows:
- SED: MDF SED certificate, thank you letter, proof of payment
- ED: MDF ED certificate; ED agreement between donor & MDF; Thank you letter from MDF; proof of payment from Donor
- SD: MDF ED certificate; SD agreement between donor & MDF; Thank you letter from MDF; proof of payment from Donor; Supplier invoice dated before donation from Donor to MDF
- Provided the spend, beneficiary, & project details are confirmed by the donor in a signed SLA, the B-BBEE pack can be provided within 1 month from the date of signature, for use in the donor B-BBEE audit.