Question NW2913 to the Minister of Small Business Development
30 October 2023 - NW2913
Mathulelwa, Ms B to ask the Minister of Small Business Development
What (a) total number of rural cooperatives has her department supported in each province over the past five financial years and (b) are the reasons that her department seems to be reluctant to fund cooperatives in the country?”
Reply:
I have been advised that:
a) The following is an account of the interventions by the Department of Small Business Development (DSBD):
Trainings and workshops were provided in rural areas to 109 and 323 in the financial years 2023/24 (quarter 1) and 2022/23 respectively to co-operatives as part of non-financial support. The workshops focused on awareness campaign on the Co-operatives Development Support Programme (CDSP) and training on cooperative governance.
In order to popularise the CSDP, the Directorate plans to organise/facilitate/host a number of awareness /outreach campaigns across the nine provinces of the country. These campaigns also provide a platform for other stakeholders to make presentations on their product offerings, contributing to non-financial support. The table (attached as Annexure A) illustrates number of co-operatives attended presentation per province.
The implementation of amended CDSP guideline by the Small Enterprise Development Agency (Seda) increase financial support of co-operatives. With implementation gaining momentum, indeed more resources will be invested.
b) The DSBD, together with its agencies, Seda and the Small Enterprise Finance Agency (sefa), seek to assist co-operatives enterprises financially and non-financially. Seda, moving forward will be the lead Department for the implementation of CSDP, a financial support programme of the DSBD with an objective to support co-operative enterprises. Before CDSP was implemented through the agency, there was a Co-operative Incentive Scheme (CIS) that was managed at the Departmental and the approach was 90/10 to 100% grant then. Currently CDSP is administered by sefa as a blended finance of 70% (Grant) and 30% (Loan) for the past two financial years (2020/21 and 2021/22 financial years). To date no disbursement has been made due to sefa application process and requirements e.g., verification of members credit records, FICA documents etc.
In partnership with Seda, the CDSP programme to offer support to various categories to eligible co-operatives. Currently funding is limited to R2,500,000 (across the various categories). CDSP guideline has since been amended and the following are the proposed funding components to the various categories:
- Category A: Start-up Co-operatives: Maximum funding of R1 500 000 per applicant.
- Category B: Expansion Co-operatives: Maximum funding of R2 500 000 per applicant.
- Category C: Secondary/Cluster Co-operatives: R5 000 000 per applicant.
The implementation of amended CDSP guideline by Seda increase financial support of co-operatives. With implementation gaining momentum, indeed more resources will be invested.