By: Anna Majavu
Several Small Enterprise Finance Agency (SEFA) staff stand accused of partnering with a corrupt financial intermediary to steal R30 million meant to fund SMMEs. SEFA CEO Mxolisi Matshamba told Parliament’s Portfolio Committee on Small Business Development that Intellimatch Financial Services, which won a contract to on-lend R30 million to SMMEs, had not lent a cent to a real SMME. All were ghosts. “This is one grand scheme that was properly planned. He (the director of Intellimatch) was moving the money to these ghost companies to refinance his construction company. Our post-investment has failed us to some extent because they should have picked [this] up,” Matshamba said.
He revealed that about five SEFA staff allegedly worked with Intellimatch to set up the corrupt deal “from origination up to post investment”. The employees have been suspended on full pay for the past four months. The revelation is the interim result of a forensic investigation that the committee demanded after they paid an oversight visit to the North West earlier this year and found that Intellimatch had listed a non-existent SMME, Kings and Queens Hut, as a borrower.
Matshamba admitted that SEFA had failed to verify the existence of many SMMEs that financial intermediaries on-lent to. He blamed the previous SEFA bosses, claiming that “throughout the merger that’s been taking place, when everybody has been located in the relevant divisions, what the previous leadership would do is say all those who could not be deployed anywhere, they were put under PIM [post-investment monitoring]”. “The post-investment function of SEFA is seriously, seriously challenged with regards to capacity. You need people with skill there,” he added.
Matshamba also insisted that SEFA would continue to use multiple financial intermediaries to distribute billions of rands to SMMEs, claiming this “builds financial inclusion”. Since 2019, SEFA has channelled R7.9 billion to 306,318 SMMEs through different financial intermediaries. Some of these lenders had not even been in business for two years when they won contracts to on-lend huge sums of money, Matshamba conceded.
DA MP Mandlenkosi Mabika slated the report, saying it did not indicate what SEFA was doing about potential nationwide corruption. “How many of the Kings and Queens do we have in South Africa? Dealing with this one only will not solve the problem,” Mabika said. ANC MP Hein April said there might even be a “Ponzi scheme” being run from inside SEFA to intentionally defraud the state. The forensic report is being conducted by Ernst and Young and the final report will be delivered to the portfolio committee by the end of September.