13 June 2023 - NW2010
Mthenjane, Mr DF to ask the Minister of Small Business Development
What are the reasons that the Small Enterprise Finance Agency as a development finance institution is enabling intermediaries to exploit the marginalised through exorbitant interest rates?”
I have been advised as follows:
That the interest rates between the Micro Finance Institutions (MFIs) and their clients are governed by the National Credit Act (NCA). All the Small Enterprise Finance Agency (sefa) funded MFIs charge interest rate that is within the rates prescribed by the NCA. However, both the clients and sefa acknowledge that the current rates are higher than what would be preferable, and sefa and its developmental clients are in the process of developing a sustainable way forward on rates and charges that bears in mind the MFIs’ need to be financially sustainable and the entrepreneurs’ need of finance at the best possible rates.