The primary instrument of investing by the NHFC remains debt funding with risk based loan pricing. However, over time, the NHFC has identified opportunities to take equity (& quasi equity) risk in investment opportunities aligned to our strategy. Typical equity & quasi-equity instruments: ordinary share capital, preference share capital, junior debt, mezzanine debt, & convertible debt.
This involves equity investing for the long term, in projects/companies aligned with our target market with the NHFC investment, planned to unlock funding from other organisations such as, the private sector and multi-lateral organisations. Investment horizon of the NHFC: +10 years; minimum target return: Prime rate + 5% per annum.
- The applicant must be a registered legal entity and preference will be on supporting BEE rated companies led by youth and women (BEE Level 4 score or better)
- There must be a demonstrable market opportunity aligned with the NHFC mandate
- A financial co-partnership arrangement must be demonstrated through the project sponsor contributing material risk capital to the project/venture
- The project feasibility must be financially viable per NHFC criteria.