The R34 million loan by the National Empowerment Fund (NEF) to Ndalo Luxury Ventures for a luxury boutique, Luminance, co-owned by Khanyi Dhlomo, may seem unfair and insensitive to some in the context of the socioeconomic challenges that millions of South Africans face, but labelling it as corruption is a stretch.
Development finance institutions such as the NEF are expected to address broader development policy objectives in strategic sectors to accelerate a thriving private sector that has been impeded by lack of access to finance, thus not being an effective engine of economic growth and fulfilling its potential for poverty alleviation.
With regards to public funds, it is understandable that greater scrutiny will come to bear on transactions, especially those involving well-known personalities.
One concern being voiced is whether a luxury boutique can in fact be categorised as a strategic sector investment that complies with the mandate of the fund, which is “a driver and thought leader in promoting and facilitating black economic participation by providing financial and non-financial support to black-empowered businesses, and by promoting a culture of savings and investment among black people”.
The other criticism is whether the fashion and lifestyle retail company should have been considered at all as an applicant.
Could it not have raised the money through traditional financial institutions because of the status of the shareholders?
I do not want to delve into the legitimacy of these concerns, but rather to highlight the ethical dilemmas that can result in business.
Even when there is no impropriety, the perception of impropriety can arise.
Such incidents have painted our country as corrupt, but this issue also presents a valuable lesson for female entrepreneurs to anticipate as they attempt to carve out their place in the economy.
The fund has been accused of favouritism in terms of the company’s application.
I do not have enough information to have an opinion on this specific matter, but there is a reasonable expectation there would be a correlation between the likelihood of an individual or a company that is publicly known having their application receive a positive response.
Their track record would make them less risky because they are renowned.
People are a brand called reputation. As the saying goes, “Your reputation precedes you”.
A positive reputation or fame can work to your advantage.
This applies to tenders, career or board opportunities, and a plethora of other opportunities.
As women, we do not all have fame and, therefore, many of us use networking as a tool to build, develop and sustain mutually beneficial relationships.
Strategic networking results in the entrepreneur being visible and getting noticed.
Networking is a critical business skill because no matter how smart and talented you are, you can’t achieve
success alone. Networked people tend to know others who can help them.
Ethics is relative. It is not always crystal clear what one should do in all situations.
The business environment is populated by human beings who are connected through social and business connections.
Business and social connections can result in favouritism, which may be detrimental to others because of the preferential treatment.
Women have to be knowledgeable about good corporate governance principles and practices to manage the downside of creating mutually beneficial relationships through networking as they also increase the opportunities for conflicts of interests and accusations of corruption, which can destroy their credibility and businesses.
»Dudu is CEO of Busara Leadership
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