The South African Enterprise Development and Finance Agency (SEDFA) has launched a R300 million Construction Fund aimed at supporting micro, small and medium enterprises (MSMEs) in the construction sector.
The fund was launched in partnership with the Construction Industry Development Board (CIDB) during an event held in Modderfontein on Tuesday.
The initiative is aimed at improving access to finance, business support and market opportunities for emerging contractors operating within South Africa’s construction value chain.
Speaking at the launch, Minister of Small Business Development Stella Tembisa Ndabeni said the fund is about more than financing infrastructure projects.
“This R300 million Construction Fund is not simply about financing projects. It is about supporting businesses that must employ people, sustain families and contribute towards local economic development,” Ndabeni said.
“It is about helping emerging contractors move from the margins of the economy into meaningful participation within the construction value chain.”
She said the fund will support qualifying construction MSMEs, particularly emerging CIDB-registered contractors, through affordable finance linked to viable contracts and growth potential.
Small enterprises focus and implementation model
According to SEDFA and CIDB, the fund will target MSMEs operating across several areas of the construction industry, including roads and civil construction, residential and commercial building, plumbing, construction materials supply, and energy-related infrastructure.
The agencies said implementation support for the fund would be sourced through SEDFA’s wholesale funding model, which uses non-banking financial institutions and other intermediaries to deliver financial services to qualifying enterprises.
These intermediaries will administer blended finance, assess applications, and provide ongoing support to participating construction SMEs.
The initiative also aims to address long-standing barriers facing construction MSMEs, including limited access to funding, procurement opportunities, technical support and participation in major infrastructure projects.
“For far too long, access to the construction economy has remained out of reach for many small businesses in South Africa,” the minister said.
Deputy Minister of Public Works and Infrastructure Sihle Zikalala described the fund as an opportunity for emerging businesses to strengthen and formalise their operations.
“This fund is an opportunity to grow, to formalise and strengthen your business, to build capacity, an opportunity to make a meaningful contribution to the development of our country and our society,” Zikalala said.
Following the launch, SEDFA will open an online portal for intermediary applications from May 13 to June 24.
