The proposed R100-billion Transformation Fund should complement existing enterprise and supplier development (ESD) programmes rather than displace them, says the Association for Savings and Investment South Africa (ASISA), as the industry reports measurable progress on transformation but warns that increasingly fragmented policy could undermine those gains.
The Transformation Fund is intended to aggregate resources, particularly ESD funding, and deploy them towards black-owned businesses and SMMEs, improving access to finance, non-financial support, and value chains.
The government has said the Fund does not create an additional obligation for businesses: the existing B-BBEE Codes require measured entities to contribute 3% of net profit after tax to ESD.
The Fund was announced in 2025 and its draft concept document published for public comment in March that year. The consultation closed on 28 May 2025. Its institutional framework has since progressed, with the Fund’s special purpose vehicle formally registered as NEF Corporation SOC Ltd and appointed by the Department of Trade, Industry, and Competition (DTIC) to incubate, manage, and control its operations.
The objective is to mobilise R100bn over the current administration, particularly for areas where companies or sectors lack the capacity to run effective ESD programmes.
Launching its 2026 Industry Transformation Report on 8 September 2026, ASISA used eight years of independently verified data since the Amended Financial Sector Code came into effect to show where transformation is delivering results and where gaps remain.
Data was collected from members with 85 000 employees, representing 98% of assets under management (AUM) for life offices and 83% of AUM for asset managers.
ASISA members invested approximately R953 million in ESD in 2025, taking the eight-year annual average to more than R814m. The ASISA ESD model combines investment capital with business acceleration, mentorship, operational and financial support, and access-to-market interventions, with the aim of helping black-owned SMEs become sustainable, procurement-ready businesses. About half of industry ESD contributions are channelled through the ASISA ESD Initiative, with the balance implemented through individual members’ programmes.
The Association’s concern is not with the objective of the Transformation Fund, but with the possibility that a centralised mechanism could displace established programmes in sectors where ESD is already working.
“The central policy question is not whether enterprise and supplier development should be strengthened. It should,” the report says. The question is how additional mechanisms can complement those already delivering measurable results.
ASISA wants contributions to the Transformation Fund and existing ESD programmes to receive equivalent recognition on the Financial Sector Code (FSC) scorecard, so that businesses choose mechanisms for their developmental impact rather than scoring advantages.
It also wants the Fund to focus on sectors, enterprises, and circumstances where ESD capacity is weak or absent, supported by independent oversight, transparent beneficiary-selection criteria, monitoring, and public accountability.
Lister Saungweme, ASISA senior policy adviser for transformation, skills development, and education and lead researcher of the report, said at the launch that the industry was already operating “at scale” in an area the proposed Fund is intended to address.
“The question is really not whether or not the Transformation Fund should exist,” she said. “Whatever model gets adopted, we need to make sure that it provides additional value. It doesn’t displace what is already working.”
The industry’s experience, she said, also shows that enterprise development is not simply about putting capital into businesses.
ASISA chief executive Kaizer Moyane (pictured) said this should not be interpreted as resistance to transformation.
“Let me be clear. ASISA members do not see transformation as a burden, but as a strategic imperative that strengthens our businesses, benefits our clients, and ultimately drives economic growth. We are therefore asking government to engage us as partners on the transformation journey by harnessing the knowledge of those who must implement it and producing rules that are not only practical and aligned, but also achievable and well researched.”
Ten frameworks, one transformation agenda
The Transformation Fund debate sits within what ASISA describes as an increasingly fragmented transformation policy environment.
Moyane said seven authorities had introduced 10 transformation frameworks over the past five years, in addition to the Amended FSC, which has provided the industry with a common yardstick since December 2017.
The frameworks span skills development, financial education, competition policy, public procurement, employment equity, financial inclusion, enterprise and supplier development, the Financial Sector Conduct Authority’s transformation strategy, and the latest B-BBEE Codes amendments and Transformation Fund. They are being advanced by the Departments of Higher Education and Training, Employment and Labour, Small Business Development, and Trade, Industry and Competition; National Treasury; the FSCA; and the Competition Commission.
The problem, Moyane said, is not that individual interventions are necessarily wrong. Rather, multiple frameworks layered onto the existing Code can create overlapping and sometimes divergent requirements, increasing cost and complexity without necessarily improving outcomes.
Saungweme said the industry had mapped the transformation landscape and found government departments and regulators pursuing the same broad constitutional and transformation objectives through different mandates, definitions and timelines.
“The challenge is really the fragmentation that is growing,” she said.
Employment equity and skills development illustrate the problem. Employment equity targets seek to change demographic representation across occupational levels, while the skills-development system is responsible for developing the pipeline of suitably qualified people.
“The pipeline would be understood from a Department of Higher Education perspective,” Saungweme said, arguing that employment targets cannot sustainably be achieved where the specialist skills pipeline does not yet exist.
The same tension arises in procurement, where National Treasury’s preferential procurement approach and the DTIC’s broader B-BBEE reforms could pull transformation policy in different directions.
Moyane said ASISA was not asking the government to abandon transformation policy.
“We’re saying do it better,” he said, calling for greater coherence and simplicity.
Procurement: don’t narrow the black-owned supplier base
ASISA supports using the state’s substantial procurement power to advance transformation and grow black-owned businesses. Its concern is the increasing emphasis on 100% black ownership in reforms being advanced by the DTIC and National Treasury.
The Association argues that making 100% ownership the principal gateway could shrink the pool of qualifying suppliers.
Its proposal is to retain 51% black ownership as the majority-ownership baseline, while recognising 100% black ownership as a premium achievement.
It also wants B-BBEE certification retained as the primary procurement gateway, preserving incentives across the wider scorecard, including skills development, enterprise development, employment equity, and management control.
In 2025, participating ASISA members directed approximately R27.8bn in procurement to 51% black-owned suppliers, including R16.1bn to 30% black women-owned suppliers and more than R10.4bn to exempt micro enterprises.
ASISA argues that procurement, ESD, and market access need to reinforce each other if transformation is to produce sustainable businesses rather than simply businesses that meet an ownership threshold.
Employment equity: the leadership gap
The strongest remaining gaps are at leadership level.
Black representation in executive management increased from 29.4% to 48.8% at life offices between 2018 and 2025, while asset managers increased from 38.8% to 53.9%. Both remain below the FSC’s 60% target.
Moyane attributed the gap to the industry’s skills pipeline.
“These are not failures of will. They are structural challenges, rooted in scarce specialised skills and the long timelines required to develop them.”
The report notes that the financial sector relies heavily on specialist skills, including actuaries, investment analysts, risk specialists, compliance professionals, and data scientists, with some professional pathways taking years to complete.
ASISA wants employment equity targets informed by transparent sector analysis and matched to the pipeline of suitably qualified professionals. It also wants employment equity and skills-development policies better aligned.
At board level, black representation at life offices slipped from about 45% in 2018 to 42% in 2025, while asset managers improved from 45% to 56%, against a 50% target.
Skills development: building the pipeline
ASISA members invest an average of R2.85bn a year in bursaries, learnerships, internships, graduate programmes, and professional qualifications.
But Saungweme said the skills-development system itself needs reform. She said the SETA system had in some respects become an obstacle rather than an enabler and argued that the final regulations should ensure that funding is directed towards the critical skills the economy requires.
“The skills system needs to be geared in ensuring that people get the qualifications required, and we spend money on programmes that actually are required by industry,” she said.
She pointed to the changing demands of the economy, including the development of the green economy and artificial intelligence, as examples of why skills policy needs to respond to where the economy is heading.
ASISA says the next phase of skills development reform should therefore be responsive to labour-market demand, accountable for the resources being spent and aligned with the transformation objectives that depend on a sustainable pipeline of qualified professionals.
Eight years of data show substantial progress – but not across the board
The report covers 2018 to 2025, using externally verified B-BBEE scorecards and verification certificates submitted by ASISA members and aggregated by an independent research team. The dataset covers approximately 98% of assets under management for life offices and more than 83% for asset managers, with transformation data covering about 85 000 employees.
Ownership recorded the strongest results.
By the end of 2025, black South Africans held 33.1% ownership in life offices and 45.8% in asset managers, above the FSC’s 25% target.
In 2018, the corresponding figures were 13.7% and 22.2%.
For life offices, 93% of participating entities met the 25% ownership target for both voting rights and economic interest. Average black voting rights were 44.21%, while economic interest stood at 34.75%.
The report also records strong performance in ESD, preferential procurement, socio-economic development, and consumer financial education.
In addition to the R953m invested in ESD in 2025, combined spending on socio-economic development and consumer financial education reached R442m.
For life offices, socio-economic development contributions amounted to R193m and consumer financial education to R116m. Asset managers contributed a further R93m and R40m respectively. Both sectors exceeded the relevant FSC targets.
Performance on access to financial services varied across the measures.
Life-office market penetration reached 135.3% of the FSC target in 2025, up from 89.1% in 2024. But transactional access remained below target at 69.3% against 80%, while the appropriate-products measure stood at 45% against a 100% target.
Skills development was also mixed. Life-office black learner absorption stood at 60.57% in 2025, below the 100% target, although it had recovered from 47.16% in 2024.
The data gives ASISA both evidence of progress and a clear measure of where more work is needed: ownership and several development and procurement indicators have moved ahead, while leadership representation, access, and parts of the skills pipeline remain below target.
“We acknowledge that the pace of transformation as a whole remains a national challenge. We present this report as a record of what our industry has achieved in this context, and as an honest account of the work that remains for our members. Above all, it is a constructive contribution to the conversation about how South Africa can best accelerate transformation and achieve more inclusive and sustainable outcomes,” said Moyane.
