National Small Business Amendment Bill: briefing

Meeting report

ECONOMIC AND FOREIGN AFFAIRS SELECT COMMITTEE
3 June 2003
NATIONAL SMALL BUSINESS AMENDMENT BILL: BRIEFING

Chairperson: Mr B J Tolo

Documents handed out
National Small Business Act, 1996- Amendment Powerpoint Presentation
National Small Business Amendment Bill (B20b-2003)

SUMMARY
The Department presented the proposed amendments on the National Small Business Act. The committee welcomed the objectives of National Small Business Amendment Bill. The discussions focused on the powers and functions of the advisory board envisaged out of this Bill.

MINUTES
National Small Business Amendment Bill
Mr Lionel October (Deputy Director General, Department of Trade & Industry) briefly outlined the main reasons behind the enactment of the National Small Business Act and these include:
-to repeal all provisions pertaining to the National Small Business Council which had been abandoned since 1998. Hence chief among the objectives of the Bill, was to delete all provisions relating to the National Small Business Council.
-to provide Ministerial Powers to establish a voice of Small Businesses
-to amend technical provisions relating to the Agency for example alignment of Ntsika mandate. The aim was to narrow down the broad mandate of Ntsika and refocus it on providing only financial support to small businesses.

Discussion
Mr Kolweni (North-West) asked whether small business representatives had been consulted in order to form part of the consultation process.

Mr October pointed out that there had been consultation with both National business organisations like Nafcoc and small businesses. However small businesses were currently not well represented, hence there was a need for a statutory advisory body to represent and voice out their interests.

Ms Nkuna (Limpopo) asked if there were mechanisms in place to enable small businesses to access funds without any difficulties.

Ms Ramodiba (Gauteng) needed a clear explanation was to what led to the down-fall of Ntsika agency.

Ms W Damane (Chief Director, Enterprise Development Unit, Department of Trade & Industry) pointed out that significant amount of loans and funds had been facilitated by Kula and Ntsika agencies. However these agencies could only provide guarantees for the loans for small businesses. Hence the department was considering exploring the option of allowing these agencies to provide direct funding for small business. More regional development institutions had also been consulted to increase the amount of finance they were making available for small businesses.

Mr Bhengu (KZN) needed some clarity with regards to the composition and functioning of the advisory board.

Mr October stated that when the Bill was formulated the initial intent was to caution against being too prescriptive. However the proposed Bill seeks to lay out the process of consultation and as well as to define the functions and powers assigned to the advisory board.

Ms Nkuna (Limpopo) conceded that there was a need for clear guidelines on how the advisory board was going to function.

Ms Damane stated that the number and composition of the advisory board would come out of the consultation that were currently conducted with the small business representatives.

Mr October added that a clear distinction had to be drawn between the voice of small businesses and the implementing agencies like Ntsika. Currently, the department was trying to strengthen the capacity of these agencies to provide a strong business support to the small businesses.

The meeting was adjourned.