There are four (4) types of loans recognised under the matrix, which are recognisable at a certain percentage. However, what is important to note, is that during a verification process, the full loan amount cannot be recognised for B-BBEE points where the recipient still owes a portion of the loan. What it means is that, where there is an outstanding loan amount, the measured entity will only claim B-BBEE points for the average period during which the loan amount has been outstanding and not the full outstanding loan amount.
A measured entity’s financial year-end is 31 December 2017 and they also measure their B-BBEE scorecard as at that date. If the measured entity provided an interest free loan of R10,000 to a supplier or enterprise development beneficiary on 30 June 2017, the formula to be used in determining the supplier or enterprise development points for the measured entity is as follow:
Supplier/Enterprise Development points = R10,000 (loan amount outstanding) x 70% or 50% (the benefit factor percentage set in the matrix depending on the type of loan) x 6/12 (the average period during which the loan amount has been outstanding) = RX
The measured entity will therefore only claim RX amount of the R10,000 outstanding loan, irrespective of whether an interest rate is attached or not. But if the loan was provided at the beginning of the year, being 1 January 2017, the measured entity would be able to claim the full R10,000 at the end of the financial year because the average duration the loan was outstanding was twelve (12) months.
It must further be noted that a measured entity will be able to claim supplier or enterprise development points for the duration of the period that those amounts remain outstanding. For instance, in the above example, if the same loan amount of R10,000 is still outstanding on 31 December 2018, then the measured entity would be able to claim the full R10,000 (R10,000 x 12/12) as supplier or enterprise development.
Important to note that, the term of the loan agreement does not mean that the measured entity will be able to claim the full outstanding loan amount, because B-BBEE compliance is measured over a particular period and only the amount that was outstanding during that measurement period will be claimed. This means that if a loan was only outstanding for two (2) months during a measurement period, only the average duration the loan was outstanding, which is 2/12 will be claimable.
However, if the loan amount is fully repaid by 31 December 2017, the measured entity will not recognise the particular spend by applying the outstanding loan amount formula, but through application of the standard formula provided in Annexure 400 (B), provided the contribution is aligned to the principles of Code Series 400
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