DBCM, Debswana and Namdeb all operate investment funds or business incubators that promote enterprise development. In addition to investing capital, these incubators provide the companies they invest in with a support structure including skills development in respect of management, as well as finance techniques and business procedures.
De Beers Matlafalang
De Beers Matlafalang Business Development (Pty) Ltd (DB Matlafalang), which was launched in September 2003, is DBCM's enterprise development vehicle. The company is wholly owned by DBCM but operates as an independent separate company.
The purpose of DB Matlafalang is to facilitate the creation, promotion and expansion of sustainable, black-owned businesses. It provides capital in the form of equity and seeks to ensure the requisite business skills are transferred to entrepreneurs. DB Matlafalang incorporates third party experts and financial institutions to help facilitate skills transfer. A key focus area is to seek out business opportunities in and around our mines which will be viable beyond the life of the mine. Examples include the establishment of marine agriculture around our west coast operations and tourism opportunities in Kimberley at the new Big Hole museum.
The DB Matlafalang board has just approved investments totalling R1.5 million (US$235 000) for two black-owned businesses that will operate within the Big Hole museum precinct. Initiatives to assist black entrepreneurs to participate in the De Beers supply chain are also being explored, and a number of entrepreneurs provide corporate clothing, steel fabrication, loading and hauling. DB Matlafalang currently has a mandate to invest R10 million (US$1.6 million) and may request additional funds depending on the viability of the projects presented.
Peo Holdings
Peo ("seed") is our longest-established enterprise development venture. It was founded in 1997 to assist the government of Botswana in economic diversification and to promote citizen ownership in business, contributing to citizen empowerment and local wealth creation. Peo is a 50/50 joint venture between Debswana and De Beers Botswana.
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Peo has assisted in the establishment of 45 businesses and has invested a total of P20 million (US$4 million), creating 1 057 jobs. Financial assistance for start-up and expansion is provided in the form of equity and loan funding, with Peo taking a maximum stake of 49% in the new business. Investment projects range in size from P50 000 (US$9 800) to a maximum of P5 million (US$977 000), with an average of P720 000 (US$141 000) per investment. Peo is currently involved in 17 projects throughout the country.
In addition to financial assistance, Peo provides financial and administrative skills development and support for entrepreneurs. |
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This is vital given the generally high failure rate of small businesses and has put Peo's investments in line with international norms of small and medium business survival. Over five years, 60% of businesses have survived, with significantly higher survival rates in larger businesses and those that Peo has helped to expand. As a result, Peo is now looking to significantly increase the size of investment per company.
Peo funds businesses in any sector, as long as criteria such as commercial viability and the entrepreneur's ability to manage the business are fulfilled, which is the case with on average 10% of applications. Consequently, assisted businesses are as diverse as a fast-food franchise, a sorghum milling operation and a removal company, all of which will continue to exist and drive economic growth and national wealth in Botswana when revenues from diamonds eventually decline.
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