National Small Business Regulatory Review: briefing

Meeting report

TRADE & INDUSTRY PORTFOLIO COMMITTEE
15 September 1999
NATIONAL SMALL BUSINESS REGULATORY REVIEW: BRIEFING

 

Documents handed out:
Plan for Small Business Development : presentation by Dr Kholo
Small Business Promotion Strategy : presentation by Dr Kholo
Ntsika: Enterprise Promotion Agency: Programmes for 1999/2000
[see Ntsika website for this info]
Khula Enterprise Finance (Ltd): Services directory
[see Khula website for this info]

 

MINUTES
Dr P Kohlo, Chief-Director : Centre for Small Business Promotion gave a presentation to the committee on the National Small Business Regulatory Review.

Questions from members

Ms F Mahomed (ANC) : There is a major breakdown in information from Khula Enterprise Finance (Ltd) and Ntsika. We are getting reports in this regard as people are not aware of what is actually happening, now what are you doing about this?

Response : Most of the issues raised are being covered in the mid-term review. We are currently looking at putting together communication strategies for Khula and Ntsika.

Ms F Mahomed (ANC) : How many Local Business Service Centres (LBSC) are established?

Response : Presently we are standing at 93 LBSCs throughout the country.

Mr P Gomomo (ANC) : The Abbreviation RFI is used throughout your presentation, what does it mean?

Response : It stands for Retail Finance Intermediaries.

Mr Moosa (ANC) : There are far too many programmes going on, where exactly are the key focuses?

Response : Yes, I admit that there are far too many programmes and this concern is being addressed. The general feeling is that we should prioritise what programmes are giving the best returns.

Mr K Gigaba (ANC) : How is information being disseminated to young people and how are young people educated in the options available to them?

Response : We have had intensive meetings with the Department of Education to extend entrepreneurship in the curriculum. We are committed to provide this information to schools who want it. Furthermore we are working together with the Youth Commission to make inroads in this area.

Ms F Hajaij (ANC) : My concern relates to the rural areas and women. What is done to uplift the position in which these people find themselves?

Response : Ntsika is targeting rural areas and in their Tourism Support programme they deal with women in rural areas. We have placed this as a key area to be addressed.

Ms Ntuli (ANC) : I am shocked with the fact that no formal meetings are being held with the provinces. This is unacceptable as the local governments and SMMEs are the vehicles for promoting these programmes. It is important that you link up with the local government structures to be successful.

Response : We have a plan to revive a monthly meeting with the provincial helpdesks. Local authorities are also involved in the mid-term review strategy and will be consulted in future programmes.

The Chairperson made the remark that there are many issues in the presentation that need some explanation, for example, more detailed information about the budget, but due to time constraints another meeting would have to be called.

There were no further questions and the meeting was adjourned.

Appendix 1:

Plan for Small Business Development
Presentation to the Portfolio Committee on Trade and Industry and Select Committee on Economic Affairs
Date of Presentation: 15 September 1999
Prepared by: Centre for Small Business Promotion (CSBP)

A. The National Small Business Policy Framework

1. Key Objectives of the National Small Business Strategy

• Creating an Enabling Environment for Small Business

• Facilitating greater equalisation of income, wealth and earning opportunities

• Creating long-term jobs

• Stimulating economic growth

• Strengthening the cohesion between small enterprises

• Levelling the playing fields between bigger and small businesses

• Preparing small businesses to comply with the challenges of an international competitive economy

2. Principles Underlying The National Small-Business Strategy

• The strategy is based on a joint vision for big, medium and small businesses

• All segments of the small business sector need attention

• The business efficiency and competitiveness of the whole small enterprise sector has to be developed

• An integrated support strategy has to give attention to both supply and demand side of small business activities

• Black advancement in the enterprise sector is a key factor in all spheres of the strategy, with special emphasis on other marginalised or disadvantaged groups

• Scarcity of public funds demands careful prioritisation of support programmes and the skilful matching of different resources

• Support policies will be sector-focussed and targeted with strict control of the application of public funds and full recognition of the market orientation of our economy

• Institutional framework for small business support has to be restructured in order to reflect the evolving institutional diversity, the provincial thrust of policy implementation and effective bottom-up and top-down co-operation and coordination

• Ultimate responsibility for the national strategy rests with the DTI

• The private enterprise sector, co-operatives, NGOs, business associations and foreign assistance programmes all have a critical role to play in an integrated small business strategy

3. Key Elements of the Support Framework

• Creating an enabling policy and regulatory environment

• Facilitating the establishment and strengthening of policy and support institutions

• Facilitating access to support services for SMMFs

B. Developments Since White Paper

Creation of an enabling policy and regulatory environment

• Enactment and Promulgation of the National Small Business Act

• National Small Business Regulatory Review

• Amendments to the Usury Act

Establishment of Policy and Support Institutions

• Ntsika Enterprise Promotion Agency

• Khula Enterprise Finance (Ltd)

• National Small Business Council

• Centre for Small Business Promotion

• Provincial SMME Desks

Facilitation of Access to Support Services

• Non-Financial Support (Ntsika Divisions)

Business Development Division

- Local Business Service Centre Porgramme

- Service Provider Development Programme

- Service Provider Network Development Programme

Market Access and Business Linkages Division

- Tender Advice Centres

- Business Linkages

- Local Industrial Parks (Infrastructure development)

- Group Purchasing Programme

- International Competitiveness

Management and Entrepreneur Development Division

- Training of Trainers

- Organisational Capacity Building

- Mentorship Programme

- Development and Accreditation of Training Programmes

Technology Division

- Technology Programme

- Manufacturing Advisory Centres

- Quality Infrastructure Programme

Targeted Assistance Division

- Programmes for the Youth

- Programmes for the Disabled

 

- Programmes for Women

 

- Support programme for Tourism Enterprises

Research and Information Division

- National Small Business Data

- Programme Development, Implementation and Support

- Small Business Research

- Annual Review - Status of Small Business

 

· Financial Support Services (Khula Divisions)

Khula Credit Guarantee

- Individual Guarantee Scheme

- Portfolio Guarantee Scheme

- Institutional Guarantee Scheme

Khula Loans

- Business Loans

- Seed Loans

Khula Equity Fund

Khula Institutional Support Services

- Capacity Building for RFIs

- Mentorship Scheme

- Khula Start

- Khula Youth start

- Research Programme

 

· CSBP Policy Initiatives

Development of a Procurement Support Programme

Development of a Franchising Support Programme

Development of the Brain Network and Call Centre

Development of a Monitoring and Evaluation System

Review of the National Small Business Development Strategy

Development of a Local Economic Development Programme

 

· Advocacy - Voice of Small Business

Following the demise of the NSBC, a private sector driven initiative funded by the EU has been initiated. The four major chambers(FABCOS, SACOB, NAFCOC and AHI), the CSBP and other stakeholders are working on the development of a South African Network of Chambers of Commerce and Business Organisations programme.

C. Challenges in the Implementation of the National Small Business Strategy

· Coordination and Prioritisation of Activities

 

· Instituting mechanisms for Building of Capacity and Sustainability of Implementing Institutions

 

· Increasing Outreach and Establishing effective Communication

 

· Facilitating strategic partnerships between DTI, other government

 

· Setting clear-cut targets and deliverables over the next five years

 

· Reassessment of the mandate and role of Support Institutions (Ntsika, Khula, CSBP, SMME Desks)

 

· Consolidating existing programmes and aligning them with growth opportunities and needs of small business

 

· President's Opening Speech to Parliament

- Emphasis on the development of a co-operative movement

Link SMME development with Local Economic Development as a strategic initiative

- Review of Policy on SMME Development

The Regulatory and Mid Term Strategy Reviews in progress Job Summit Declarations

- Business Incubation - (Ntsika), DACST/DTI/EU Programme, DTI Debentured Properties held in Business Partners

- Business Service Provision - Business Development Services (Ntsika)

- Access to Finance - Khula

- Mentorship Scheme - Khula and Ntsika

D. Plan of Action

1. Coordination

· At National Level

In order to optimise the synergies which exist between different government departments, revive the Inter-Departmental Committee on Small Business

At Provincial Level

· Revival of Working Committee and planning meetings

 

· Establish joint responsibility for taking forward the recommendations:

- The Mid-Term Strategy Review

- The National Small Business Regulatory Review

 

· Prioritization of national projects

 

· Capacity building in institutions

Within DTI

· Integration of small business programmes into DTI sectorial directorates DTI resources earmarked for small business promotion

2. increase of Outreach

· Strategy for increasing capacity of Service Providers.

 

· Strategy for establishing one LBSC for each Regional Service Council (RSC)

 

· Replication and Extension of Manufacturing Advisory Centres (MACs) to at least one per Province

3. Sector-Focussed Support

· Revise service delivery approach towards a differentiated, sector-focussed and growth oriented small business strategy

 

· Accelerate the initiative between DTI sectorial directorates and CSIR of developing strategies for promoting the comparative advantage of growth sectors

 

· In recognition of regional differences, work with service providers so as to develop their understanding of the specialised needs of various sectors in the respective regions

4. Mid-Term Strategy Review

· Initiated a strategy review process in order to examine the capacity of existing institutional framework, appropriateness of programmes, utilisation of resources and suggest mechanisms for closing gaps or adjustments to the strategy

5. National Small Business Regulatory Review

Establish a Review Unit to systematically and pro-actively monitor the regulatory environment impacting small business development

6. Monitoring and Evaluation

Establish a Monitoring and Evaluation System that will monitor the utilisation of resources and provide feedback on policy and programme formulation

7. Broaden and Strengthen Strategic Partnerships Locally and Internationally

· Manufacturing Advisory Centres(MAC s) - DTI/CSIR/NPI/Ntsika/Chicago Manufacturing Centre

 

· Quality Infrastructure Programme - DTI/ SAQI/Ntsika

 

· BRAIN - DTI/ Local Government /GCIS/ Post Office SPIT Programmes/Department of Education

 

· International Linkages - DTI/ SSBF/EU-TIDP/Ntsika/ SADC

 

· Research Capacity - Universities/ Research Institutions/ Ntsika/Khula

 

· Manage Relationship with Donor Community (Donor Co-ordination)

 

Appendix 2:
Small Business Promotion Strategy

Persons who wish to establish and grow small businesses require

Access to

 

· Information on how business works

 

· Finance

 

· Markets

This access has been provided by the BRAIN Project

 

Business Referral And Information Network

Easy Access to Relevant Information needed: SMMEs (830 000, employing 4 million)

[Editor's note: the diagram is unscannable]