Small and emerging contractors in South Africa’s built environment sector have been given a major boost through the launch of a new Construction Fund aimed at improving access to finance for black-owned enterprises. The R300 million funding package was jointly established by the Small Enterprise Development and Finance Agency (SEDFA) and the Construction Industry Development Board (cidb) to create a dedicated financing intervention for the construction sector. The Fund is designed to address one of the most persistent challenges facing emerging contractors, namely: limited access to affordable and sustainable finance.
Speaking at the launch of the Fund in Modderfontein, Johannesburg, Minister of Small Business Development, Ms Stella Tembisa Ndabeni, said the Construction Fund is a deliberate intervention to unlock access to finance for emerging contractors and bring them into South Africa’s mainstream infrastructure economy. Its core purpose was to address long-standing barriers that have kept black-owned, women-owned and youth-owned enterprises, particularly those in townships and rural areas – on the margins of the economy, she said. “This is about economic justice in practical terms. It is about moving emerging contractors into the mainstream economy by giving them access to the financial tools and partnerships they need to grow,” she said.
Echoing her sentiments, Deputy Minister of Public Works and Infrastructure, Mr Sihle Zikalala, said the construction sector must remain central to inclusive economic growth, describing it as the “fly queen of the economy” because of its critical role in delivering infrastructure such as schools, clinics and other public facilities for communities. He said that despite its importance, many small and emerging contractors continue to face barriers in accessing public sector opportunities. The Construction Fund, he said, is a practical response aimed at improving access to finance for small, black-owned, women-owned and youth-owned enterprises, while also strengthening non-financial support to ensure they are able to grow, succeed and create jobs.
The CEO of the cidb, Mr Bongani Dladla, said the Construction Fund comes at a critical time when traditional funding institutions have limited appetite for financing emerging contractors. He said the Fund is a practical response to ensure that emerging contractors are not excluded from the construction economy due to lack of access to finance. “This Fund is about keeping emerging contractors active in the sector by giving them a real chance to participate, grow and build sustainable businesses,” he said.
The Interim Board Chairperson of SEDFA, Mr Patrick Makape, said the launch represents the implementation of a shared vision between SEDFA and cidb, one that recognises that sustainable sector growth requires deliberate collaboration between developmental finance institutions and industry regulators.
Implementation of the fund will be driven through SEDFA’s wholesale funding model, which leverages non-banking financial institutions and other intermediaries to extend finance to qualifying construction SMEs. Following the launch, an online application portal will open for eligible intermediaries to participate in the programme.
To qualify, institutions must demonstrate a proven track record in financing construction SMEs, be registered with the National Credit Regulator, and have the capacity to design and deliver appropriate lending instruments for small enterprises. They must also have systems for MSME onboarding, support and reporting, and provide proof of at least 20% match funding or an existing lending book.
The intermediary model is designed to improve efficiency and scale by leveraging existing lending systems, supplier networks and enterprise development platforms. Approved intermediaries will administer the blended finance facility, facilitate access to funding, and provide ongoing support to beneficiary enterprises.
The Fund is expected to improve access to finance for construction SMEs, strengthen participation across the value chain, support job creation, advance transformation, and promote sustainable enterprise growth.
Applications for intermediaries open on 13 May 2026 and close on 24 June 2026 via the SEDFA website.
Applications can be submitted online via the SEDFA website at www.sedfa.org.za. Women entrepreneurs requiring assistance with applications may visit their nearest SEDFA branch office. Branch contact details are available on the website.