Enterprise & Supplier Development

Enterprise and Supplier Development (ESD) is a core part of B-BBEE, designed to empower black-owned businesses by including them in supply chains. It promotes growth through mentorship, financial support, and procurement integration.

What is Preferential Procurement?

Preferential Procurement (PP) measures spend on qualifying Black-owned suppliers, including those that are Black women-owned, QSEs, and EMEs. Higher supplier B-BBEE levels result in greater recognition, directly improving your scorecard. A sub-minimum target must be met to avoid an overall downgrade.

What is Enterprise Development?

Enterprise Development (ED) promotes economic growth by supporting SMEs. The ME does not need to procure from the SME, but it is encouraged to consider them as potential future suppliers.

Qualifying contributions include:

• Grants and donations
• Loans and credit facilities
• Services, time, or mentorship

MEs must spend 1% of NPAT on ED. Bonus points are earned if beneficiaries graduate into Supplier Development or when jobs are created as a direct result of ED.

What is Supplier Development?

Supplier Development (SD) supports small businesses already in your supply chain. The ME must procure goods or services from the supplier while providing support.

Contributions can be financial or non-financial, or both. MEs must spend 2% of NPAT to access the full points allocation.

Proof Required for ESD Verification

• Verification of beneficiary B-BBEE status
• Confirmation that the beneficiary meets the definition of “black people”
• ED & SD agreements between the ME and beneficiaries
• Proof of contributions (financial or non-financial)
• Beneficiary letters confirming the nature and value of assistance

Keep full records of all contributions and signed agreements. Proper documentation is essential for successful verification.