Broad-Based Black Economic Empowerment Act, 2003 (Act No. 53 of 2003)

Industry Charters

Financial Services Charter

Code Series FS600: The Measurement of the Enterprise Development and/or Empowerment Financing Element of Broad-Based Black Economic Empowerment

Statement 602: The Measurement of the Empowerment Financing and Enterprise Development Element for Measured Entities that are not exempted from contributing towards Empowerment Financing

3. Definitions, Key Measurement Principles, Standards and Target

3.2 Enterprise Development for organisations participating in Empowerment Finance

Purchase

3.2.1

Subject matter of this paragraph: This paragraph relates to the following statements within the Generic Codes:

• Code 600 Statement 600; and

• Code 800 Statement 800 Statement 806.

Enterprise Development Scorecard for Organisations participating in Empowerment Financing:

Criteria	Weighting Points	Target
Qualifying ED contributions made by the measured entity as a percentage of the target	5	0.2% of NPAT

3.2.2

Applicability of the Generic Codes: The provisions and principles contained in the relevant statements apply to all financial institutions, subject to the following variations:

3.2.2.1

The following examples of Enterprise Development Contributions specified in the Generic Codes are not recognisable as Enterprise Development if performed by, or on behalf of the reporting institution that is not exempted from the Empowerment Financing Element of this FS Code:

•	Investments in beneficiary Entities;

•	Loans made to beneficiary Entities;

•	Guarantees given or security provided on behalf of beneficiaries;

•	Preferential credit terms granted to beneficiary Entities;

•	Credit facilities made available to beneficiary Entities;

•	Facilitating access to credit for beneficiary Entities without access to similar credit facilities through traditional means owing to a lack of credit history, high-risk or lack of collateral;

•	Provision of finance to beneficiary Entities at lower than commercial rates of interest;

•	Relaxed security requirements or absence of security requirements for beneficiary Entities unable to provide security for loans; and

•	Any substantially similar contributions.

3.2.2.2

The following categories of Enterprise Development Contributions specified in the Benefit Factor Matrix are not recognised as Enterprise Development if performed by, or on behalf of financial institutions:

•	Loans and Related Contributions; and

•	Equity Investments and Related Contributions.

3.2.2.3

Recognition Levels for contributions to certain types of Beneficiary Entities will be as follows:

Type of Beneficiary	Recognition Level
30% Black Women Owned EMEs	150%
50% Black Owned - EMEs	150%
25% Black Owned / Black Women EMEs	100%
30% Black Women Owned QSEs	100%
50% Black Owned - QSEs	100%
25% Black Owned / Black Women QSEs	75%
EMEs in general	75%
Level 4 and above QSEs	50%
Generic with at least 25% black ownership and Level 4	50%