Funding scheme for co-operatives

Primary co-operatives can now access funding of up to R1.5 million, thanks to a Department of Small Business Development's programme.

The Co-operatives Incentive Scheme (CIS) helps co-operatives access funding, provided they meet a certain criteria.

The department said one of the requirements is that entities must be incorporated and registered in South Africa in terms of the Co-operatives Act of 2005.

The scheme is also said to be more favourable towards women, youth and people with disabilities.

The department added that people who are historically disadvantaged, have projects in any of the  economic sectors, have emerging co-operatives with a majority black ownership and adhere to co-operative principles have a better chance of accessing the scheme.

Co-operatives that want to apply for funding can download an application form from the department’s website.

It should be completed and submitted, along with an original SARS Tax Clearance Certificate, a detailed business plan, a co-operative resolution to apply for the CIS grant; a copy, signed by the founder members, of the co-operative’s constitution; copies of the curriculum vitaes and identity documents of the co-operative’s directors and a copy of the co-operative registration certificate.

Co-operatives can contact the department’s provincial offices for advice on how to put together an application.

Some of the guidelines of the scheme include that 70 percent of the funding may be used for infrastructure, machinery and equipment, commercial vehicles, technological improvements and tools.

Thirty percent of the funding may be used for working capital.

Primary co-operatives in South Africa are recognised as co-operatives with a minimum of five members. The co-operatives must also be registered, have proper banking details and a constitution that governs the co-operative.

Due to limited funding, prioritisation will be given to those co-operatives that demonstrate the potential to sustain jobs, eventually create more jobs, promote economies of scale and scope and contribute to community development.

The scheme offers a minimum of R400 000 and a maximum of R1. 5 million in funding to each co-operative.