BLACK ECONOMIC EMPOWERMENT
Preferential procurement financing gives Ecsponent a leg up
Ecsponent’s Development Fund provides vendor financing and acts as a middleman in managing enterprise development
Black economic empowerment (BEE) codes and the National Credit Act, albeit well-intended pieces of legislation, are at odds when it comes to promoting procurement through black-owned businesses, says Terence Gregory, CEO of Ecsponent. Ecsponent invests in niche financial services businesses and manages preferential procurement for large companies. In terms of the new BEE codes, a third of a business’s procurement spend was expected to be obtained through black-owned businesses, Gregory said on Tuesday. "On the other hand, you cannot lend to an individual who can’t pay you back, because that is reckless lending under the National Credit Act. So how do these chaps get any form of funding?" Vendors that were unable to access funding or lacked the skills to procure goods cost-effectively could not access supply chains. "We see this as a tremendous opportunity." The complexity of the BEE codes has spawned an industry that advises large companies on how to meet scorecards. The Ecsponent D...