Women and SMMEs: briefing by Department of Small Business Development

Women, Youth and Persons with Disabilities

09 June 2015
Chairperson: Ms P Bhengu (ANC) (Acting)
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Meeting Summary

The Committee met with the Department of Small Business Development (DSBD) while some Members of the Portfolio Committee on Small Business Development were in attendance as well. The Department briefed the Committee on women in the Small Medium and Micro Enterprises (SMMEs) and cooperatives sector highlighting the mandate, vision, mission and strategic objectives of the Department. The presentation outlined the chief directorate for gender, youth and people with disabilities and its functions. Members were informed of strategy and policy instruments for gender mainstreaming before highlighting the target/criteria, offerings and plans for 2015/16 and successes and challenges of each programme of the Department.

Members not very pleased with the presentation because it was more or less the same to a presentation delivered in January, did not contain any radical plans for the future and did not get to the details and realistic facts which Members wanted to grapple with and assess if whether progress was being made or not. There were questions around how the Department was assisting hawkers to make them small enterprises and cooperatives, transfers of funds, manufacturing goods in SA for beads and crafts, the market for the sale of such goods, monitoring the participation of women in the mainstream economy and why there were so few women on the boards of companies.  Other issues raised were around gender sensitive budgeting, a dedicated gender unit in the Department and generally how small businesses were being developed to challenge the large enterprises. Other discussion was held on how many disabled people benefited from the Department’s programme and were employed, structures for monitoring and evaluation and how the Department was collaborating with other departments for mainstream economic participation of women and people with disabilities. 

Meeting report

Department of Small Business Development Presentation to the Portfolio Committee on Women in the Presidency

Ms Nomvula Makgotlho, Chief Director, DSBD, began the presentation by looking at the mandate, vision, mission and strategic objectives of the Department. Members were also informed of the Department’s structure/organogram. The Department had a chief directorate for gender, youth and people with disabilities to manage and facilitate the provision of support to new and existing women-owned Small Medium and Micro Enterprises (SMMEs) and cooperatives, to increase the number and sustainability of SMMEs and cooperatives run by people with disabilities and ensuring the mainstreaming of youth enterprises. The function of the directorate was to develop policies and strategies to create an enabling environment for targeted groups to participate in the mainstream economy, provide financial and non-financial support for the sustainability of enterprises owned by targeted groups, facilitate strategic partnerships to support enterprises owned by targeted groups, advocate for targeted groups to be economically empowered, monitor, evaluate and review economic empowerment interventions aimed at targeted groups and roll-out commitment five from the Youth Accord.

In terms of strategy and policy instruments, at the core of “gender mainstreaming” was a commitment to change attitudes so that women and men were equal participants in any initiatives for the private sector and to adopt gender-sensitive indicators for the purpose of on-going monitoring and evaluation of gender mainstreaming. The business units were required to report on gender disagreement performance. This was important information for determining baseline and ensuing proper planning and targeting. While the Department had been implementing women specific interventions for women in an informal manner, concentrated efforts had been made to develop an all-inclusive mainstreaming framework for targeted groups (youth, women and people with disabilities). The framework will look at, amongst others, policy development focused on systematic incorporation of issues that affected women across policy, procedures and programmes, intervention design (to establish a baseline) for planning, targeting and inclusion of the targeted groups and a Women’s Enterprise Development Strategy. The envisaged activities for 2015/16 included the mainstreaming framework concept document, benchmark and consultation report on public sector mainstreaming and a draft mainstreaming framework.

The Department’s list of programmes targeting women included:

  • Isivande Women’s Fund (IWF)
  • Emerging Enterprise Development Programme (EEDP)
  • Ba’Vumile Skills Enhancement Programme
  • South African Women’s Entrepreneurs Network (SAWEN)
  • Technology for Women in Business (TWIB)
  • Technogirl Entrepreneurial Programme (TEP)
  • Partnerships with the Small Enterprise Development Agency (SEDA)  

Ms Makgotlho then took the Committee through each of the above programmes briefly describing each, target/criteria and offerings and plans for them in 2015/16 before looking at successes and challenges of each programme. In conclusion, the Department’s structure had been recently approved by the Department of Public Service and Administration (DPSA) while the gender focal point remained at Chief Director level, responsible for Gender, Youth and People with Disabilities. (See Document)


Ms M Chueu (ANC) felt that the Department needed to realise that it only had three years remaining to complete the strategy for programmes when more kids were being born and there was an influx of people coming into the country so if the strategy took five years to compete, this was a problem. How was the Department assisting hawkers to make them small enterprises and cooperatives? These were the kinds of problems which needed to be alleviated through a clear plan for mainstreaming. She wanted to know which programmes the Department was keeping from the Department of Trade and Industry (DTI) and which would be discarded. She wanted specific numbers of women helped by these programmes because women constituted 52% of the population. This population needed to pay rent but there were municipalities where these women could not pay rent – how was the Department assisting them to ensure they had an income to pay their services? This was not very clear. When the Department referred to mainstreaming, who was it mainstreaming with? Municipalities? Departments? Programmes in Departments? How long would the transfer of the Isivande Fund from the Industrial Development Corporation (IDC) take? Was the Department helping women continue with their lives in the meantime or were they waiting on the fund transfer? In terms of the programme for beads and crafts, were the beads being manufactured in the country? How were these women making money from their craft in terms of sales? Where were these crafts being sold? It seemed like this work was fading away because people did not wear the cultural products being produced anymore. The Department was not starting businesses and she was not clear on what was being done with the existing ones. There was also no talk of cooperatives so she was confused by the presentation. She was also not sure if SAWEN was progressing – were they monitoring and measuring the participation of women in the economy? Was SAWEN just lobbying? Why were there so few women participating in the boards of companies? She failed to see where the radical-ness was in the whole plan.

Ms Makgotlho said that the national strategic framework was presented to the economic cluster which requested the Department to put together certain processes some which required research and funding which the Department did not have. The Department committed to moving from the national strategic framework hence it seemed as if the Department was starting afresh with putting together a strategy but most consultations and processes were put together. To complete the process of putting together the strategy would not even take one year. With hawkers, the Department had a fully fledged programme and a unit dealing with the informal sector. There was training of women in the retail and wholesale sector in Gauteng and there was dedicated Department funding looking at women who were hawkers through the informal sector strategy. Most of the beneficiaries were women in the formalising of some establishments (if they were willing to participate) in working with the DTI. Women in other informal businesses were also being targeted so it was not just hawkers. There were new entrants being trained and the same members were not being rehashed. Most of the Department’s programmes were inherited from DTI but the majority would be reviewed to be in line with the strategy of the new Department and to cut out those programmes which were not working. New interventions would also be brought on board such as the fund for women, youth and people with disabilities. Most of the funds in SA had support for women but the Department would be talking to these entities to include the information in the mainstreaming strategy being put together. The transfer of the IWF was almost finalised after starting the process late last year. Payments and administration was being processed under the old administration but the Department was aiming for a seamless process. With the beads, there was no manufacturer for the beads as yet in SA but this was an area for the Department to look into not just for beads but other products as well, for example, cloth and material. The Department was assisting women in terms of competitiveness to take advantage of existing market platforms. She would make the information available on how many women were assisted in various areas by the Department. In the Department there was a branch looking at cooperatives which linked cooperatives to certain programmes and funding in the DSBD for training and to be registered. She would make the numbers of women cooperative available to the Committee. 

Ms N Tarabella-Marchesi (DA) noted that the same presentation was seen in January and she found this very unfair and unprofessional. She wanted to know the exact numbers of women coming into businesses and how the Department was intervening – she did not see this and the Committee needed to know this information for oversight purposes. SAWEN was just a talking network and it was not ensuring that women were coming into businesses and programmes and this was not right. She wanted to know who in the Department was focusing only on gender issues – was there such a unit or gender focal point which worked with other departments? Was the Department ensuring their budget was gender responsive?

Ms Makgotlho apologised profusely for the structure of the presentation. She was responding to the request by the Committee but she could package the presentation in such a way to give details and specific facts. She said SAWEN was not just for networking but was involved in training women as members of boards – she would provide this information to the Committee as well. SAWEN was one of the programmes which would be reviewed. She accepted that there was no specific growth plan for the SMMEs and cooperatives and there was no dedicated follow-through after support was provided – this was one of the issues which would be included in the strategy for the empowerment of women. There was no dedicated gender-focal person in the Department yet but only a broad unit looking at women empowerment issues.

Ms L Van der Merwe (IFP) shared the sentiments of Ms Tarabella-Marchesi and noted the Department’s presentation was symptomatic of government’s approach to women – the presentation was just smoke and mirrors with the same rehashed programmes. She could not say whether any women had been empowered from this presentation or where. Government was gender blind in its approach to the allocation of funding. It sounded like a lot was being done but it was just a drop in the ocean. The Department needed to come back on specifics and facts of specific areas. She did not want the same flowery rehashed presentation but for the realistic facts to be clear on whether progress was being made or not. She wanted a real breakdown of the number of women who benefited.

Ms Makgotlho was honest in saying the Department had not implemented gender-sensitive budgeting

Ms Chueu said that the Department needed a gender focal person either at the level of Chief Director or DDG to take decisions on issues of gender to hold the Department accountable. She also wanted to know about the women who were harvesting oysters in Natal and what was being done to make them entrepreneurs to challenge the big enterprises like I&J. How did the Department work with other departments to enhance small businesses moving towards challenging those big enterprises being supported at this point in time?

The Acting Chairperson asked how many disabled people were benefiting from the Department’s programmes because she was worried it was a small number referred to.  She was concerned that the Department’s organogram did not have a monitoring and evaluation structure and this made her question how monitoring and evaluation would be done. Were there any Memoranda of Understanding (MOUs) with other departments to mainstream the economic participation of women and people with disabilities?

Ms Makgotlho indicated that the Department was working with other departments on mainstreaming and support. There were tireless transversal agreements with other departments and a substantial number of MOUs, for example with the Department of Basic Education, Science and Technology and Cooperative Governance and Traditional Affairs (CoGTA), to take advantage of procurement processes for SMMEs and cooperatives. She would make the information on the number of disabled people employed available. The Department was new so the numbers were not impressive but the picture would change soon.

Ms M Khawula (EFF) was worried about projects not registered and being neglected, for example, those feeding orphans and agricultural projects.

Ms Makgotlho replied that there were many registered companies and the Department would embark on a process to link these registered companies up with programmes and entities to assist them in putting together business plans and funding in a seamless way.

Mr Thokozani Magwaza, Acting Director-General (DG) said the starter packs were not yet provided currently for new SMMEs and cooperatives but the Department was working with the Small Enterprise Finance Agency (SEFA) on this. Indeed there was an absence of a radical approach in terms of the programmes but there was a review of all programmes with DTI to align them directly with the mandate to support SMMEs and cooperatives by the Department in a radical manner. Because the programmes were far from radical, they were being reviewed for up-scaling and this process was underway. The mandate was quite broad and the demands on the Department quite high and it was recognized that objectives would not be met with the programmes currently so this was being worked on. With the approved structure by the DPSA, the Department had three branches one of which was entrepreneurship and enterprise development in which there was a chief directorate for gender, youth and people with disabilities – this chief director would be responsible for all matters gender-related and be the focal point under the DDG for entrepreneurship and enterprise development. In terms of monitoring and evaluation, under the branch enterprise competiveness support, there was a chief director for research, monitoring and evaluation which was primarily for monitoring and evaluating the Department’s interventions to establish their impact, effectiveness and empowerment of the unit to introduce interventions for beneficiaries. With the MOUs with other departments, DSBD was in conversation with a considerable number of departments, including, Social Development, Basic Education, Energy, Science and Technology and Higher Education and Training. The purpose of discussions was to establish links for the DSBD to leverage and benefit from their programmes. The Department did not have a huge budget but Cabinet made a decision, at its lekgotla in February, on how the Department could make up for the lack of financial resources to work together closely with other government departments with bigger budgets to leverage from them. To operationalise this decision, the Department was in talks with other departments to see how it could bring SMMEs and cooperatives up to speed to benefit from these line-function departments, for example, in the solar heater space from the Department of Energy. 

Ms R Bhengu (Chairperson of the Portfolio Committee on Small Business Development) provided clarity on where the Department was to give everyone the same understanding of where things were. The Department was at a transition phase as the 2014/15 budget was passed according to the functions as contained in DTI meaning that all the programmes that were implemented as they were under DTI. The DSBD then had to do a scientific assessment of all programmes to discard those that were not in line with the mandate of the new Department. This assessment had not been completed and this must be understood. During the presentation of strategic plans this year, some of the entities had not met with the Department so the Committee sent them back except, SEDA. It was very important for this to be understood. The Committee met with the representative structures of SMMEs and cooperatives where it was revealed during the interactions that, access to markets were an issue, access to finances were an issue, access to adequate infrastructure for operation and support was an issue, lack of adequate training and the high cost of doing business which related to the incentives being provided. The Committee met with the Department to highlight that its strategic plans should be aligned to these issues and for all programmes to be geared to the challenges of small businesses and cooperatives. The Committee also identified that the funding model of the Department and entities did not speak to the needs of all small businesses – money came in through the Department and then transferred to the fund managers who would then charge high interest rates of between 42% and 110%. There was an issue of risk but this was not an excuse looking at the way some communities were run- no one ran away with the stokvel money because there was trust. The money for small businesses was chartered through intermediaries charging high interest rates. This was raised in the Committee’s budget vote debate along with funding for women-owned businesses where it was highlighted that women constituted 52% of the population but there was only R16 million available for the funding of their businesses and this was not enough – the same could be said for cooperatives. The issues raised today had been raised by the Committee. Government had committed to developing SMMEs and cooperatives through public procurement and infrastructure spending so this should be kept in mind when meeting with the Department and to focus on government as a whole and what opportunities there were in other departments instead of working in a silo fashion. Government decided that the national school nutrition programme was set aside for cooperatives but this programme could be expanded to increase income and extend hours of working – this was something the Department had not yet done. Women were found at taxi ranks in all kinds of weather but the presentation was not speaking to these vendors – even if there was no programme specifically for this yet, the Department should identify the challenges and what the needs were develop a response to this glaring issue moving forward. The Department was to make business easy and cost effective for those selling on the streets. The Committee felt the Department should be on the ground because Members knew more than officials did because they were representing the public. The Committee visited a dignity packaging cooperative in Soweto after work was given to them by Social Development but the products were not produced by small businesses but from big companies like Unilever and Sasol yet the people in this cooperative were earning R800 per month. The Department needed to intervene to ensure the entire value chain belonged to the cooperative and ensure sustainable markets. She would have been happier if the Department spoke to specific and tangible things. Instead, the Department spoke to what used to happen and not what had to happen now.   

The Acting Chairperson wanted to know exactly what was happening on the ground with mainstreaming of gender issues and the economic participation of disabled people and for the Department to assist these people in the mainstreaming.

Ms Chueu appreciated the input from Ms Bhengu and noted that it was unfortunate the presentation was not satisfactory. She also appreciated that some Members of the Portfolio Committee on Small Business Development were present. She raised the issue of a developmental state which did not wait for people to come to them but went out to the people. Many of the people in small business were forced there but now they had opportunities and democracy so they needed to be developed. A developmental state needed to make people understand the need for their development – this was a responsibility for oppressed minds. There were no white people out there selling stuff – only black people who were put there by an oppressive system. She thought the Department was meant to get such people out of their situation before coming up with any strategy as these people were on the streets for years. This was not seen in New York because the system allowed small businesses to develop whereas the system in SA kept people on the streets in all kinds of weather. Such people could not make money when it rained and if there was five days of rain there was no money to feed the children –this was the responsibility of the Department. . Also the price of food was too high maybe because the food was imported. Why was the Department not worried that tomatoes were being imported from Israel? If a desert-like Israel could produce tomatoes then what was SA? The Department needed to be clear on its plans for the private sector to help government to move forward because this private sector helped the previous government thrive. The Department could not only concentrate on infrastructure.  

Ms Van der Merwe appreciated the comments made by Ms Bhengu and asked if that Committee could make its oversight report available. She asked the Department to paint a picture of the challenges it was faced with and the strategy to address those challenges in partnering with other departments as funds followed functioned. In future, this was what the Committee wanted to see instead of old presentations.

Ms Makgotlho responded that the Department would come back with a presentation structured in a way to address the issues raised. The Department was looking into the Committee's oversight report in terms of the issues raised and it would come up with a report in response. She said the input from Members were enlightening. 

Ms Tarabella-Marchesi also thanked Ms Bhengu for her input. She questioned the stokvels, as initiatives by women, noting that there were current cooperatives which were looking to start up financial banks – was there a way they could be incorporated into the Department because they were currently under Treasury? Why could cooperatives not be the ones to open up supermarkets and supply school feeding schemes?

Ms Makgotlho replied that the issue of stokvels was raised for a while because they were a valuable source so the Department needed to empower them. The feeding schemes were part of the traversal arrangements between the Department and that of Basic Education.

Ms M Matshoba (ANC) was very disappointed by the Department as they were supposed to be very close to communities. There were many cooperatives existing with nothing in communities. Entities, such as the IDC, needed to be reviewed

Ms Makgotlho said the IDC, and other development funding institutions, were part of a report produced by the Presidency reviewing funding institutions as they were not responding to the developmental agenda of the country. There were many cooperatives registered in the past and the Department was looking at how to support them. The Department would be celebrating International Cooperatives Day on 4 and 5 July and invites would be sent to Members to participate and see how some of them were supplying the private sector with good and services.

Ms Khawula asked how Chinese people in SA became successful in SA with businesses while black people did not.

Ms Bhengu said the report of her Committee could definitely be made available when it was complete – the Committee was working on the third draft. SEDA and SEFA were migrated from the DTI to the DSBD while the ICD remained with the Department of Economic Development. With stokvels and consumer cooperatives, everyone needed to understand that SA was a mixed economy driven by government intervention, the private sector and cooperatives. Cooperatives were not receiving the support it deserved yet they were the ones to ensure community participation in the mainstream economy so the attitude around cooperatives needed to change to understand their role in the mixed economy. There was a need to plough back into the communities. Cooperatives cooperated while companies competed – cooperatives were democratically run as opposed to companies where the shares dominated. Development was going to the people and improving what there already was not imposing what one thought the community wanted. Capitalism stifled cooperatives. Many successful cooperatives were still in existence today and were started by Afrikaaners, for example, Sanlam, Nedbank. KWV etc. and there was a need to take the same approach to underdeveloped areas.

The Acting Chairperson asked that the Department provide the Committee with the outstanding information. The Department would be called in future as part of the Committee's oversight as there were cooperatives in the constituencies of Members. The Department was not just a mistake by the President but to realize the economic emancipation of women on the ground. 

The Committee was to adopt the Committee minutes for 2 June 2015 but it was decided that Members be given time to read them to be adopted at the Committee's next meeting.

The meeting was adjourned. 

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