Question NW1356 to the Minister of Small Business Development

Reply:

The Department of Small Business Development (DSBD) has initiated the Shared Economic Infrastructure Facility (SEIF), a programme aimed at assisting small enterprises (including informal, micro, small and medium businesses as well as co-operatives) in improving their competitiveness and sustainability, to become integrated into the main economy. The SEIF is an instrument responding to the ecosystem identified Infrastructural needs through product markets, containers, SMME industrial hub etc. for potential, informal and operational entrepreneurs as articulated in the National Informal Business Upliftment Strategy (NIBUS); Integrated Strategy on the Promotion of Entrepreneurship and Small Enterprises (ISPESE); Cooperative Development Strategy. The programme is open to the following institutions to apply on behalf of the beneficiaries: municipalities, agencies of government, secondary cooperatives, private sector through a partnership with government, provincial government, and private entities. The instrument is a 50/50 cost sharing facility with a maximum funding of up to R15 million.

Through Seda the Department is providing infrastructure (machinery and equipment) via its Seda Technology Programme unit, which has a support programme called Technology Transfer Assistance (TTA) which supports SMMEs with machinery and equipment needed by SMMEs to grow their businesses. This takes the form of a grant of up to R1.2 million. Also, the incubation programme, provides infrastructure to SMMEs in various sectors to grow their businesses by giving them access to physical infrastructure needed. These are actual buildings, plant and equipment and skills development in the form of technical mentors in that particular sector.

Seda continuously reflects on how it positions itself and contribute meaningfully to the small business ecosystem and understand the importance of extending our services and offerings to SMMEs and Co-operatives. With limited resources, the agency continues to leverage on strategic partnerships and programmes that will stimulate economic growth, improve small enterprise performance, productivity, long-term sustainability whilst creating entrepreneurship awareness in these areas.

Through Seda’s access points, SMMEs and Cooperatives are provided with business related information, advice, consultancy, training, coaching, mentoring and business development interventions to improve their business performance. These services are aimed at providing solutions related to various business functions from production to human resources, finance, marketing, quality improvement and export development.

• Seda has an Entrepreneurship in Schools Programme that encourages learners to consider entrepreneurship as an alternative career to employment. The main objective of the programme is:
• To influence the mind set of learners by encouraging them to become job creators instead of job seekers once they leave the schooling system.
• To equip learners with entrepreneurial knowledge and skills needed to start and manage their businesses; and
• To improve entrepreneurial activity amongst the learners and educators.

• Entrepreneurship in Schools (Step up to a Start Up) is a Programme together with Primestars that will support educators through Boot camps to create entrepreneurship awareness amongst the youth and educators. To date, Seda has supported 13 190 student beneficiaries.

• The Enterprise Coaching programme is one of Seda’s flagship programmes aimed at developing and enhancing the competencies of business owners by providing them with knowledge, skills and tools needed to grow their businesses. It is a 10-month coaching programme. Coaching sessions included topics such as financial assistance, self-aware mastery, social marketing strategies, financial management and debt counselling, the dtic incentives, worker’s motivation, productivity, best practices in business. Successful entrepreneurs were invited to share challenges, successes of running a successful business, for example, in the manufacturing sector. A total of 159 enterprises were supported in the 2022/23 financial year. All of the supported enterprises recorded an increase in turnover and more than 374 jobs created.

• Seda through its Learning Academy has also developed different training programmes. These programmes are credit bearing and accredited by the Services Seta. Quality training aims to assist organisations of all types to implement and operate the Quality Management System (QMS) to increase effectiveness, consistency, and customer satisfaction, explain the benefits of implementing QMS and understand the quality, management principles. Whilst Food safety introduces Food Safety, Understand Pre-Requisite programme, HACCP (Hazard Analysis, Critical, Control, Point) system and HACCP principles and Implementing a Food Safety Management System.

The Small Enterprise Finance Agency (sefa) as a development finance institution acknowledges the importance of long-term sustainability of small businesses as they are important in reducing inequality, poverty and unemployment. Through its financing programme, sefa is enabling SMMEs to expand and grow. As part of post-investment support services small business are provided with mentoring and business support. During the quarter 4 of the 2022/23 financial year, sefa initiated a business diagnostic project with 144 clients funded under the Township Rural Entrepreneurship Programme (TREP). The diagnoses conducted focused on the following:

• Owner capability and shortcomings,
• Financial sustainability focusing on development of financial discipline, financial planning and profitability of the business.
• Efficient utilisation of Human capital/resources,
• Efficient and effective operational systems,
• Creating sustainable market share,
• Technical know-how and looking at possible improvements and systems.

The diagnostic results indicate the following:

• Load shedding is affecting most of the businesses.
• No financial systems in place as most of them are not recording their business transactions.
• Most businesses have no clear market.
• Some of the businesses are poorly located, impacting their ability to attract new markets.

sefa continually works with its clients to understand their challenges as to better support these businesses in growing the South African economy. Business support and mentoring are essential ingredients that add value to SMMEs and ensure their continued growth and sustainability in these trying economic times.