Address by the Minister for Small Business Development, Hon Khumbudzo Ntshavheni (MP), on the occasion of the Debate of Budget Vote on Small Business Development
Deputy Minister of Small Business Development, Mama Nokuzola Rosemary Capa
Chairperson and Honourable members of the Portfolio Committee on Small Business Development
Honourable members of the National Assembly
Chairperson and Board Members of Small Enterprise Development Agency (SEDA)
Chairperson and Board Members of the Board of Small Enterprise Financing Agency (sefa)
The Director-General of the Department of Small Business Development
CEOs of our entities SEDA and sefa;
Senior Officials from the Department and our entities
Representatives of the organised business formations and other partner institutions
Ladies and gentlemen,
On the 25th of May 1963, 32 African leaders came together to form the Organisation of African Unity, one of its objectives being to encourage political and economic integration among member states. 58 years later to the Day, we, Honourable Members of the National Assembly are debating Budget Vote 36 for the Department of Small Business Development. Today, as we celebrate Africa Day – we are encouraged because another aspiration of our continent’s forebears for economic integration is on the verge of being realised through the coming into effect of the African Continental Free Trade Area (AfCFTA) on the 1st of January 2021. We celebrate this milestone and the commitment of the African leadership to forge ahead despite the challenges posed by the Covid-19 pandemic.
We are fully aware that the goals of the AfCFTA and the African Union’s Agenda 2063 of transformed economies and jobs will not be realised without the contribution of AU’s individual member states to transform their own economies and create jobs. South Africa’s path to economic transformation and job creation is guided by Vision 2030 as espoused in the National Development Plan (NDP).
The NDP’s central goals are expanding employment and entrepreneurial opportunities on the back of a growing, more inclusive economy. The naysayers will claim that the Covid-19 pandemic has put paid to these goals. However, Sun Tzu has taught us that “victory depends on conditions that are always in flux”. For us the Covid-19 has provided a once-in-a lifetime opportunity to ensure that by 2030, South Africa has a more diversified economy consisting of dynamic products and greater depth and breadth of domestic linkages. To achieve these, we will need to revert to what the architects of the NDP advocated for – being to intensify the simulation of local and foreign markets and strengthening conditions to promote labour-absorbing activities. To be specific on matters affecting small businesses, the NDP proposes that we must:
- Increase exports focusing on amongst others construction, mid-skill manufacturing, agriculture and agro-processing, tourism and business services;
- Reduce cost of regulatory compliance,
- Create a larger, more effective innovation system closely aligned with firms that operate in sectors consistent with the growth strategy,
- Support for small businesses through better coordination of relevant agencies, development finance institutions, and public and private incubators,
- Strengthen financial services to bring down their cost and improve access for small-and medium-sized businesses
- A commitment to public and private procurement approaches that stimulate domestic industry and job creation, and
- A labour market that is more responsive to economic opportunity that requires amongst others the review of regulations and standards for small and medium enterprises
Of course, the architects of the NDP could not have anticipated a global pandemic which fast-tracked the advent of the Fourth Industrial Revolution. As a government, we had to respond to the emerging constraints and adopted the Economic Reconstruction and Recovery Plan (ERRP) to ensure that South Africa’s economy is rebuilt to achieve both recovery and inclusivity.
Allow me to table the Budget for Vote 36 of the Department of Small Business Development for the 2021-2022 financial year and the Medium-Term Expenditure Framework (MTEF) estimates. The deployment of this Budget will be used towards achieving the goals of NDP Vision 2030 and the AU’s Agenda 2063 guided by the ERRP.
We are tabling this Budget for debate exactly 5 days before we mark the 2nd year since the appointment of the National Executive by the State President, His Excellency Mr Matamela Cyril Ramaphosa on 30th of May 2019. I will therefore take this opportunity to report back on the progress we are making to achieve the programme we adopted in 2019, albeit it had to be adjusted and enhanced to respond to material conditions. On several occasions, we have come to this House to report on how we intervened to assist SMMEs at the height of the Covid-19 hard lockdown, the House has received a report from the Auditor-General on the performance of our Department on Covid-19 relief measure and we had the pleasure of hosting the State President when he publicly interacted virtually with the beneficiaries of our Covid-19 Relief Interventions.
This Budget allocates R868 million of the transfers and subsidies to the Small Enterprise Development Agency. Of this, R666 million is allocated for the strengthening and expansion of SEDA’s presence across the country with a goal of maintaining a SEDA office in each district of our country. The enterprise development work of SEDA is the frontline of our services to SMMEs including cooperatives. Through the SEDA network of branches, the Department assists SMMEs and cooperatives to:
- Comply with regulatory requirements thus reducing the cost thereof, and
- labour market that is more responsive to economic opportunity that requires amongst others the review of regulations and standards for small and medium enterprises.
In addition, since we took the decision that access to support must not be determined by the ability to complete application forms, SEDA has been assisting entrepreneurs to complete various applications including business registrations with CIPC, SARS and UIF. Since 2019, a total of 70 512 entrepreneurs have visited SEDA offices for some form of support. SEDA offices also serve as a One-Stop-Information Centre on business information.
Ladies and Gentlemen,
The work of the Department and its Agencies is structured and coordinated under the SMME Support Plan Towards the Attainment of Vision 2030 that was adopted in 2019. This Plan consists of 10 programmes, namely:
- SMME-focused Localisation Programme which is enabled through the Small Enterprise Manufacturing Support Programme (SEMSP)
- Township and Rural Entrepreneurship Programme (TREP)
- Incubation and Digital Hubs Roll-Out
- Start-Up Nation
- Young Entrepreneurs Support
- SMME Business Infrastructure Support
- Cooperatives Support
- SMME Scale-Up (Expansion)
- Informal Businesses Support.
To continue implementing the SMME Support Plan, R157 million of the transfers and subsidies to SEDA is allocated to the SEDA Technology Programme. Through the Technology Programme SEDA is responsible for four (4) programmes of the SMME Support Plan, which are:
- Incubation and Digital Hubs
- Start-Up Nation,
- Product Standard Conformity, and
- Technology Transfer.
Incubation and digital hubs
The Department has set itself a target to establish 250 incubation and digital hubs by 2024. To date, 101 incubators have been established on the set target of 96 which include 22 Centres for Entrepreneurship and Rapid Incubation (CFERIs) in TVET colleges and Universities including an additional four (4) centres at University of Johannesburg (Soweto Campus), Rhodes University (Makhanda Campus), Nelson Mandela University (Gqeberha Campus) and University of Venda (Thohoyandou Campus). Some of the CFERIs at TVET Colleges include those at Northern Cape Rural TVET (De-Aar and KHATHU Campuses), Maluti TVET College Phuthaditjhaba Campus, West Coast TVET College (Vredendal Campus) and the new ESAYIDI TVET College (Umzimkhulu Campus). A full list of the CFERIS is available at the DSBD and SEDA websites.
SEDA will also facilitate the establishment of an additional 27 new incubators, mainly in townships and rural areas. The new incubators will assist with the establishment of approximately 1 290 new enterprises that are expected to create at least 25 000 new jobs. Some of the areas the additional incubators are planned for underserviced Provinces and Districts aligned to the Departments SMME Support plan including the districts of Sarah Baartman, Joe Gqabi, Fezile Dabi, Xhariep, Sedibeng, West Rand, Amajuba, iLembe, Umgungundlovu, Mopani, Waterburg, Nkangala, Namakwa, Pixley ka Seme, Dr K Kuanda, The Central Karoo and Overburg. The already existing 79 incubators have assisted SMMEs to sustain 86, 000 jobs with SMME ecosystem partners. Some of these existing incubators include those located in Amatole District Municipality; Ekurhuleni Metropolitan Municipality, King Cetshwayo District Municipality, eThekwini Metropolitan Municipality, OR Tambo, Harry Gwala, Ehlanzeni District Municipality.
The existing incubator footprint covers most Districts in South Africa and is the biggest in Africa. Having said that, more work will be done in partnership with the Private Sector. The full list of the location of the Incubators is available at the DSBD and SEDA websites. Furthermore, four Digital Hubs were established, and the remaining 2 hubs will be completed in the 2 and 3rd quarters of the 2021/22 financial year. The completed 4 Hubs are located in Mpumalanga (Mbombela and Gert Sibande), Mafikeng and Botshabelo in the Free State.
In line with the goal of the NDP of supporting small businesses through better coordination of public and private incubators amongst others, the Department has recently established a partnership with NASPERS LAPs and Foundry programme with the purpose of optimising resources for the deployment of digital hubs and support to for Start-ups. The NASPERS partnership is already operational to complete the Alexandra (Johannesburg) hub. In addition, the Department through SEDA has also partnered with other private incubators such as the Black Umbrellas network of 7 incubators, ONE-Bio Life Science Incubator in Cape Town, the Propeller Incubator in Eastern Cape.
Honorable Members - By 2030, ICT and digital sector will underpin the development of a dynamic and connected information society and a vibrant economy that is more inclusive and prosperous. A seamless information infrastructure will be universally available, accessible and will meet the needs of citizens, businesses and the public sector. This will provide access to the creation and consumption of a wide range of converged services required for effective economic and social participation, at a cost and quality at least equal to South Africa’s main peers and competitors.
ICT will continue to reduce spatial exclusion, enabling seamless participation by the majority in the global ICT system, not simply as users but as content developers and application innovators”. – (NDP 2030)
In relation to the aspirations of the NDP and as pronounced by the His Excellency, The President in his State of the Nation Address in 2021 my Department will in the next few months finalise the National Start-up Nation Framework that will guide Governments support to Technology or High Growth Start-ups for rapid scale up in local and Africa Markets. Our work will endeavour to better support grassroots innovators and small digital businesses that can compete in local, regional and international markets whilst remaining locally relevant. The envisioned support instruments will render support to young start-ups and innovators providing needed infrastructure, industry collaborations, enterprise supplier development linkages, access to funding and risk capital at Pre-Seed, Seed, Series A and B stage and investors linkages, build strong firm level teams, revenue (or a paths to revenue) high touch mentoring and coaching aimed at building strong leadership, disruptive business models and scalable businesses poised for rapid growth.
Product conformity with standards and technology transfer
The Technology Transfer & Technical Assistance Programme is one of three technology platforms under Seda.
The Programme provided a set on technical and innovation support intervention as listed below:
- Open Innovation Challenges – solving core supply-chain and supplier-development challenges of large private and public corporates, by working with the nation-wide Seda network of branches and business incubators to source innovative SMMEs with specific skills, products and services that are able to pitch novel solutions to the challenges, thus improving access to markets.
- SMME Innovation Forums – sector-specific multi-stakeholder events, sharing entrepreneurial knowledge and skills for SMMEs, facilitating introduction to latest sector innovations, appropriate technology and intellectual property, with stimulating peer-networking and forming of productive partnerships. Engagements with universities, research institutions, design and innovation centres, science councils, for knowledge sharing on relevant technology and intellectual property to upscale production. Some examples of sector forums held: Industry 4.0, Cosmeceuticals, Automotive, Textiles, Construction, Agro-Processing.
- Investor Pitching – closing the gap between entrepreneurs and investors, arranging nation-wide pitching competitions with judging panels of funders, together with entrepreneurial pitching masterclasses, supporting innovative SMMEs to present their business cases more effectively, thus improving access to finance for SMMEs, and impactful deal-flow for investors. Examples of funders, and investor criteria, e.g. IDC, Sefa, FinFind.
- Technology and skills transfer, Intellectual Property (IP) support (Training, first stage IP registration and Licensing), Lean Manufacturing systems, Product and Process Technology Incentives (Equipment and Machines, Design Software, ERP System), Productivity Improvement, Benchmarking, Workplace organisation (5S) improving workplace efficiency Productivity / Workplace Challenge, Product development support.
- Quality Health Checks – On-site gap audits to assess suitability of current state and future requirements of SMME for management system certifications, product conformity testing and design interventions.
- Management Systems – Assisting SMMEs in implementing their business systems that improve productivity and access to national or international markets, through compliance to national and international standards. Typical management systems include: ISO 9001 Quality, ISO 14000 Environment, SANS 18000 Health & Safety, ISO/FSSC 22000 Food Safety, and others such as testing laboratories, welding, and medical devices. Once system implementation is complete and functioning, further support for certification audits can be assessed.
- Product Testing – Promoting access for SMMEs to accredited laboratory testing and conformity certification of their products to national standards, product labelling, and compulsory regulations. Examples: food, beverages, construction materials, chemicals, clothing, cosmetics.
- Product Design – Improving product and packaging design for SMMEs, through design-thinking workshops, design clinics for product-specific advice, and design support to improve product and packaging functionality and aesthetics.
The Technology Transfer Assistance programme is supporting 44 clients and has approved support for an additional 79 clients.
The Quality and Conformity assessment programme has supported 53 SMMEs with QMS interventions and 63 SMMEs with Product Testing and Certification Support
This Budget allocates an amount of R1.25 billion of the transfers and subsides to sefa for purposes of implementing:
- the Small Enterprise Manufacturing Support Programme (SEMSP) to enable SMME-focused Localisation Programme,
- Township and Rural Entrepreneurship Programme (TREP), and
- MME financial intermediaries, as direct lenders to SMMEs and co-operatives, and part of our contribution to the transformation of the financial services sector
The Small Enterprise Manufacturing Support Programme (SEMSP) to enable SMME-focused Localisation Programme
I would like to take this opportunity to reiterate that the Localisation Programme is not negotiable. I want to clarify that the programme was not thumb-sucked as some who want to protect the participation of the few in the economy were suggesting. The programme was also proposed by Business for South Africa in their submissions on the Economic Reconstruction and Recovery Plan and therefore there is a social compact between, government, business, labour and communities through the NEDLAC on it. In addition, the 1000 products that have been earmarked for SMME-focused localisation and prioritised for support under the Small Enterprise Manufacturing Support Programme (SEMSP). Equally, the targeted 1000 products were compiled from the lists submitted by large retailers and manufacturers such as Pick’nPay, SPAR, Dischem, Clicks, Unilever, Massmart, Aspen etc.
Furthermore, in line with the proposal of the NDP to commit to public and private procurement approaches that stimulate domestic industry and job creation, the ERRP has prioritised the finalisation of the Procurement Bill through the National Treasury. In this regard, the Department is finalising, in consultation with Provinces, the selection of 250 out of the 1000 products that must be designated over a 4-year period for public procurement. We proposed the designation of these products 1000 products through the DTIC over a 4–5-year period because we are fully aware of the need to build local capacity for quantity, quality and price competitiveness.
R268 million of the sefa allocation is to the SEMSP and in this regard and through the SEMSP, we have already supported at total of 15 enterprises to the value of R125 million out of the 33 enterprises that were approved to the value of R320 million – we remain appreciative of the partnership of the Black Industrialist Programme under the Department of Trade, Industry and Competition. Some of the enterprises supported include:
Sakhe Engineering And Manufacturing (Pty) Ltd, is a 100% black-youth owned business based in East London. The business is owned by entrepreneur, Mr. Khaya Madiba (35 years).
Mr. Madiba is a qualified Structural Engineer with a Masters in Engineering Management who registered the business in 2020 for the purpose of acquiring 2 interdependent engineering businesses. The businesses are involved in the designing, manufacturing and automation of machines and steel fabrication. Through the funding provided of R12.4million, 30 jobs are maintained in this critical part of the economy.
Mahikeng Meat Market (Pty) Ltd is a black youth owned and managed by Mr Keorapetse Ramoenyane. Mahikeng Meat Market was established for the main purpose of operating a red meat processing plant in Mahikeng that would provide red meat products to organizations in and around Mahikeng. The company was funded as a start up with funding of R4.4 million in order to renovate premises, set-up the plant, acquire delivery vehicles and obtain relevant certifications.
Christo & Nani Trading (Pty) Ltd is a 100% black South African owned company. It manufactures bricks and supplies building materials and energy products. The business is located in Bloemfontein in Mangaung, Free State Province. The business is 100% owned by Mr. Michael Mabusela. It employs 15 employees on a permanent basis. They sell huge quantities of bricks to both building contractors and households.
Joyboy Trading cc is an existing business which is owned and managed by Matshepo Khumalo and Rejoy Khumalo. The members are husband and wife which makes this a family business. Both members are involved in the day to day running of the business with Rejoy occupying the role of Operations Director and Matshepo occupying the role of General Manager / Admin. The business is operating from Makula Section in Katlehong Township in Gauteng. The core services of Joy Boy Trading is the design, manufacturing and sale of a range of custom-made furniture for households, corporate and commercial business. Joyboy Trading approached sefa to raise finance of R4.9 million to use for purchase of equipment and for working capital purposes.
Wanotha Services (Pty) Ltd trading as Wanotha Road Signs originally specialized in civil construction with focus on road construction, maintenance, abrasive/sand blasting, turnkey projects, road marking and sign installation. The lack of new work in civil construction prompted Mrs Dladla to change her business focus and revert back to manufacturing of road signs which is something she knows very well, her long time passion and she has a strong network in this sector. This black female owned business based in KZN maintains 21 jobs through the funding of R4.9 million.
Integrate Now [Pty] Ltd which is 100% black owned company of entrepreneur Mr. Vincent Mabunda. Its core business is to manufacture and provide wholesale/bulk roof sheets to the hardware stores in Nkowankowa (Limpopo) and the surrounding areas. They were approved for a loan amounting to R4 817 690.23 over a period of 5 years. The said funding request was to be satisfied through a Blended Finance Program with a loan of R3 150 535.23 [inclusive of initiation fee] and BFP grant to the value of R1 677 155.00 to finance a start-up metal roof sheeting manufacturing business.
Mighty Meats (Pty) Ltd is involved in the production and manufacturing of processed meat products. These include various polonies, russians and viennas. The business currently has an average monthly production rate of 1 000 metric tonnes of finished product with available capacity to manufacture in excess of 2 000 metric tonnes per month of finished product. Mighty Meats is located in a rural part of Verulam known as Canelands and employs 114 staff most of whom reside in informal settlements surrounding the plant. The business was approached by one of its existing clients (Africa’s largest food retailer) for an additional 500 tons of product per month. Sefa funded R14 million which went toward the purchase of stock for the increased orders as well as additional cold storage capacity for the orders.
Matase Industrial Solutions is a 100% black South African owned commercial bespoke diesel generator manufacture and distributor located in Ekurhuleni, Gauteng. The business owned by Mr. Tapson Sadiki and employs 10 employees on a permanent basis and its clients includes Nedbank, ATNS, Transnet, Standard Bank, SARS, and Universities. The business received a loan and grant combination totalling R14.5m and this will enable the business will create 12 new permanent jobs and maintain 10 current jobs.
Masodi Organics is a black-female-youth owned company that offers ethnic hair care products. The business was established in 2018, and its 7 hair care product lines are listed with Clicks SA. They received loan funding to the value of R1 118 975 for working capital.
Young entrepreneurship programme
The President during the SONA in 2020, His Excellency announced 1000 youth owned businesses supported in 100 days. The Department worked closely with the NYDA and was able to deliver on this project under very difficult conditions given Covid-19 pandemic. We are continuing with this partnership as it is the biggest contributor in ensuring that we achieve the target of supporting 15 000 enterprises by 2024.
Some of the businesses that we supported include:
- JK Foods which is Manufacturing and selling moringa based spices and seasoning
- Inga Atelier which is Manufacturing leather products
- MasterMade which is Manufacturing BBQ Sauces
Some of the young entrepreneurs funded through sefa include under this initiative include:
- Kem Agric Solutions (Pty) Ltd is 100 % black youth owned and operating in Musina (Limpopo Province). The company buys and resells agricultural inputs [chemicals & fertilizers], marketing of agricultural products and the provision of consulting services. The directors of the company participated in the Pitch for Funding event held at Musina Municipality. sefa approved and disbursed R452 427.00 which was utilized in the purchase of agricultural inputs and the provision of salaries and wages.
Township and Rural Entrepreneurship Programme (TREP)
We have previously presented to this House the purpose of the TREP as to elevate enterprises in the townships and rural areas previously relegated to the second economy to the mainstream economy, and to further integrate opportunities in townships and rural areas into competitive business ventures. Some of the township and rural enterprises such as Taxis, spazashops, motor mechanics, panel beaters, hair and beauty salons, etc have for time immemorial contributed to the economy of South Africa without being duly accounted for in the statistical records at an economic level but at a household level thus minimizing the contribution of townships and rural areas into the economy but only accounted for as consumers. The R694 million of the allocation to sefa will be channelled towards supporting the TREP.
To date and under the TREP, the Department and its agencies have supported township and rural enterprises as follows:
The Autobody Repairers and Mechanics programme is allocated R300 million targeting 800 motor mechanics, panel beaters, auto fitment centres and auto spares shops in our townships and villages. A total of 950 entities were supported through this programme in the previous financial year. Those supported include Auto Precision Engineering (Pty) Ltd, which is a 100% youth – owned business. Its business operations consist of mechanical engineering focusing on the overhaul, scheming and re-boring of engines for the taxi industry and informal mechanics based in Gugulethu, Western Cape. The business is 100% equally owned by Mr Siphelo Sikolisi, Mr. Thembile Ndlondlo, Mr. Khululwe Tintelo and Mr. Mphindeleli Qalazive. Due to the high barriers to entry in this market the number of auto engineering companies in townships are very low due to the cost of the machinery being extremely expensive. They received loan facility of R2.4-million for the acquisition of heavy-duty engineering equipment, infrastructure set-up and working capital.
The spaza-shop support programme
The Spaza Shops Support Programme is a cashflow facility in the form of credit guarantee administered via the commercial banks such as Nedbank and Standard Bank that enables South Africa’s spaza shop owners with a valid operating permit to buy the stock at accredited wholesalers. We are finalising collaboration with iZaka Bank on the same scheme as part of our contribution towards the transformation of financial services sector by actively supporting the acquisition of clients by emerging black-owned banks. The Department supported a total of 10 305 spaza shops in the previous financial year. A budget of R150 million is allocated towards this programme targeting 15, 000 entities. We will also commence with the 2nd Phase of our Spaza Support and continue to partner with those who seek to enable that ecosystem. The second phase entails:
- Increase the value of disbursement to spazas so to improve stock levels, profitability and sustainability. (R7000 to R15 000).
- Ensure that all approved qualifying spazas have low-cost bank accounts as agreed with the partner banks
- Distribute the point of sales machines to all approved spazas in order to improve bankability and financial inclusion
- Through (android enabled) e-pos and POS, introduce value added services such as ability to sell prepaid airtime, water and electricity.
- Promote the usage of SASSA grant beneficiaries to utilise the Spaza as accessible cash back points
- Organise spazas to take advantages of the power of buying in groups so as to earn the bulk purchase discounts.
- Bring awareness of Known Value Items (KVIs) within the shop so as to improve profitability to shop owners and therefore empower bundle packaging of goods
- Participation of spazas on e-commerce platforms
The small-scale bakeries and confectionaries support programme is targeting 1 440 entities. In the previous financial year, 781 entities were supported.
Butcheries Support Scheme, which only commenced in November 2020, we are targeting to support 1 400 entities. Through this scheme together with the Department of Agriculture, Land Reform and Rural Development we aim to ensure that both the smallholder farmers, subsistence farmers and feedlots become suppliers to the beneficiaries of this scheme. A total of 69 entities were supported through this scheme in the previous financial year.
The Hairdressers and Personal Care Support Programme - In the previous financial year 434 entities were provided with non-financial support through SEDA. We target to support 1200 entities including with business infrastructure.
The Tshisanyama and Cooked Food Support Programme – a total amount of 1 010 entities were supported in the previous financial year and we target to support a further 1300 businesses.
Access to markets
In the 2020/21 financial year, we have reported on the work the Department has been doing to support manufacturing SMMEs to place their products in large corporates markets. We had a target to list 200 products with the private sector markets and a total of 238 products across 6 product categories were listed in the following product categories:
- Food and beverages;
- Beauty, skin care and cosmetics;
- Cleaning and hygiene;
- Hair care products and
- Clothing, Leather and Textiles.
We are proud to announce that in the list of listed products, we have added Sihle’s Brew which is owned by Mr Sihle Magubane, from Kwa-Zulu Natal who manufactures coffee. After a decade of experience in the field Mr Magubane founded his own coffee brand which offers five (5) signature blends from Decaf, Expresso, Signature, Original and Java Press. Sihle’s Brew is now found at your local Pick n Pay shelves as of 01 March 2021. Sihle also owns a Coffee shop in Randburg, North of Johannesburg and is also supplying other retailers such as Spar and Food lovers Market.
In addition, Dermacell Cosmetics and Healthcare of Ms Mapitsi Talana that produces Aloe Ferox-based skin care range has been launched in 81 Clicks stores across the country.
We continue to aggressively run our #BuyLocal campaign in partnership with Proudly South Africa and call on South Africans to choose wisely and buy products made in South Africa because it contributes to job creation and economic growth. Buying Locally produced goods is an act of self-service.
The SMME expansion or scale up programme coordinates efforts to support small and medium enterprises to scale-up their businesses and survive beyond their first five years through access to working capital, and markets for goods and services. R 288 million has been allocated for the Business Viability Programme, which aims to assist businesses with potential to scale-up or expand to turnaround their operations including when they are in financial distress. The first phase of this programme will focus on businesses that were previously funded by the Department or its agencies that would otherwise be profitable.
SMME Business Infrastructure Support is aimed at providing SMMEs including co-operatives with affordable and safe areas to produce, market and sell their goods and services, and to create business hubs for the surrounding primary producers in the area in order to stimulate economic activity in the districts.
Types of Business Infrastructure:
- Pop-Up Markets and Pop-up Stores
- Retail Space Sharing/ Co-retailing
- Trade markets
- Open markets
- Manufacturing Shared Facilities
- Office Sharing/ Co-Working spaces
The President announced the SheTradesZA platform as a programme is to support and prepare women owned enterprises to increase their participation in local, regional and global value chains. The platform targets to support majority women-owned businesses in the agro-processing, manufacturing, renewable energy, clothing and textile, cosmetics, pharmaceuticals, retail and wholesale, logistics and payment systems. In this financial year, we are targeting to support at least 2000 women-owned enterprises to participate in supply value chains through the SheTradeZA platform.
The deputy Minister will articulate the work have and continue to do under our cooperatives support and informal business support programmes.
Access to finance remains a key constraint in the development and growth of SMMEs and Co-operatives. Most small businesses struggle to access finance due to perceived risk identified by the lenders. The department will soon table the Draft SMME Funding Policy of South Africa for public comments. This draft Policy seeks to make proposals on the coordination of SMME funding across the public and private sector.
Critical to the Department’s mandate is to work on reducing regulatory burdens and creating a conducive policy and legislative environment to support the growth and sustainability of SMMEs and Co-operatives. The Department has made great strides in this regard; notably the proposed amendments of the National Small Enterprise Bill was published in Government Gazette for public comments. The amendments mainly attended to the establishment of the Small Enterprise Ombud Service. The draft Bill also included additional issues on regulating the unfair business-to-business practice. During 2021/22 financial year, the Department aims to take the National Small Enterprise Amendment Bill through Parliamentary processes after Cabinet approval. The Department will also embark on the revision of the Schedule to the National Small Enterprise Act with an aim to ensure alignment and utilisation of the SMME definition. For the medium-term period, the National Small Enterprise Amendment Bill will be promulgated and implemented.
In addition, assistance to municipalities to roll out the Red-Tape Reduction Programme (RTRP) is an important component of the work of the Department as the Government aims to create a conducive environment for the establishment of new enterprises and growth of the existing ones. To ensure that the Department addresses issues of reducing red tape, three districts will be assisted with rolling out the Red-Tape Reduction Programme Pilot Administrative Simplification Programme for SMMEs and Co-operatives. It also intends to amendment the Businesses Act No. 71 of 1991 to provide for the norms and standards and a simplified uniform business licensing framework. This will invariably standardize the business licensing process across all municipalities and contribute to the reduction of red tape.
Through our work, we are committed to ensure that the next Development Plan of South Africa commits itself to a number of millionaires and billionaires the country must nurture for a true economic transformation.
I thank you!