CSI: R5.2m Funding to Uplift Rustenburg Community
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Futuregrowth’s partnership with Nurcha, a construction services group, provides bridging finance to contractors who would normally struggle to access finance from institutions like banks. The contracts must look to develop local infrastructure or improve community facilities. Only those contracts worth more than R1million are considered for bridging finance.
Nurcha - which also offers management support to the contractors – would have discontinued bridging finance loans this year, were it not for the partnership with Futuregrowth. On behalf of its pension fund clients, Futuregrowth contributes 70 percent of the partnership’s capital used to fund the contractor’s bridging finance requirements and thus facilitates private sector investment directly into rural infrastructure projects.
Kgomongwe’s company, Little Rock Trading, is using the bridging finance to renovate and extend Bapo and Nkukeme primary schools, near Rustenburg. This includes relaying floors, putting in new ceilings and building new ablution facilities using ‘enviro loo’ technology. This is the third project tackled by Little Rock Trading –which is owned by nine women. The group was first approached by Lonmin Mines to convert mine hostels at Wonderkop, also near Rustenburg, into family units. That project was valued at R19million. It has also refurbished another primary school in the area. As a result of these two projects, Kgomongwe, a trained nurse, has now become Lonmin’s supplier of choice.
As part of Nurcha and Futuregrowth’s developmental strategy, 59-year old Kgomongwe also only employs those who live in her local community, in an attempt to empower that community. For her current project, she employs 38 builders from Rustenburg.
Kgomongwe has also been enrolled in the new Nurcha training and development programme. She says the bridging finance facility has been perfect for a developing contractor such as herself, where finding funding from conventional institutions often proves challenging. It has allowed her to pay her suppliers on time, without having to rely on payment from her clients first. The facility also doesn’t charge interest on the funding when it’s not being used – unlike other loans.
Nurcha and Futuregrowth have signed the partnership for the next five and a half years, although this could be extended at the end of the term. Futuregrowth expects the facility could support some R5billion worth of projects.
Other projects that have already received loans from the facility are the construction of a bus route in KwaZulu-Natal, totaling R10.7-million, the construction of a reservoir in Tshwane for R28.9-milion, and a road upgrade in Port St John’s in the Eastern Cape, worth R23.4-million.
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