engineroom

The Enterprise Development (ED) component of broad-based black economic empowerment (BBBEE) is intended to drive the transfer of skills and resources from large companies to smaller black-run companies. The department of trade & industry's (the dti) Codes of Good Practice rate a company on a mix of monetary investment and support of small to medium-sized businesses as a percentage of net profit after tax. Up to 15% of a company's BEE score can be made up of ED.

It allows for the spread of investment to beneficiaries who were not part of the ownership and equity deals of the early drive to narrow based BEE
It stimulates support to smaller enterprises, recognising the growth of such enterprises as being crucial to job creation and economic growth
It encourages the transfer of skills from successful larger businesses to newer and less skilled enterprises
It creates more favourable conditions for a beneficiary’s cash flow management and the securing of grants and loans
It allows corporations with restricted ability to transform at an ownership level other opportunities for BEE compliance