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Apr 28, 2004

​In line with its support of Black Economic Empowerment, Africa’s largest retailer, the Shoprite group, has announced an innovative sustainable business venture with the Department of Trade and Industry’s credit facilitation agency for small, medium and micro enterprises (SMMEs), Khula Enterprise Finance Limited. 

This milestone treaty was signed today (Wednesday, 28 April 2004), signifying the start of a long-term association between Khula and the Shoprite group, which will offer entrepreneurs from previously disadvantaged communities the singular opportunity to enter the retail trade. 

The Shoprite / Khula treaty will create positive spin-offs for BEE in South Africa by granting successful SMME applicants a number of OK Franchise concessions on negotiable terms. Dual guidance by OK Franchise and Khula in terms of outfitting, training and mentorship of the SMMEs promises to deliver maximum viability of this groundbreaking BEE initiative. 

Whitey Basson, CEO of the Shoprite group, says that the treaty will create a precedent for future co-operation between enterprising Government structures like Khula, and the retail trade. 

“The issuing of a limited number of franchises by Shoprite will serve as the initial pilot project on whose successes and lessons the future expansion of this project will rest,” Basson said. “The strategic importance for SMMEs lies in their access to retail space in Shoprite’s multi-national retail chain.” 

Managing Director of Khula, Xola Sithole, says this treaty signifies Khula’s commitment to help entrepreneurs from previously disadvantaged communities enter the mainstream economy. “This partnership with Shoprite is a model for future partnerships between government agencies like Khula and the private sector in addressing the economic challenges facing our country,” Sithole said. He says Khula will be launching similar joint venture initiatives across different industries like mining and petroleum. 

Shoprite and Khula will share the capital investment and risks associated with promoting this BEE initiative, whereby Khula will accord loans to the concession holder for the payment of equipment and the outfitting of stores. Shoprite will supply the stock without the solicitation of securities from the concession holder, as well as longer-term repayment provisos, especially on first consignment. 

Furthermore, Shoprite has undertaken to support the concession holder with training and support in lieu of concessionaire affairs, whilst Khula will apply its mentorship programme to provide generic business and financial instruction for the SMME. 

The granting of Franchises by Shoprite to deserving and qualifying persons or entities with an emphasis on BEE will not as its objective disqualify other deserving applicants, however the emphasis is on the creation of successful business models in line with Shoprite and Khula’s commitment to sustainable development.

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