Question NW3299 to the Minister of Small Business Development

Reply:

I have been advised that:

The Department of Small Business Development (DSBD) capacitated the Small Enterprise Finance Agency (sefa) by transferring a total amount of R885 939 000.00 in the past 12 months (01 October 2022 to 30 September 2023) to continue the implementation of the Township and Rural Entrepreneurship Programme (TREP).

Date transferred	Amount
25-Nov-2023	R 238 313 000
24-Jan-2023	R 238 386 000
26-May-2023	R 181 884 000
30-Aug-2023	R 227 356 000
Total transferred	R885 939 000

The DSBD and its entity sefa are reviewing a number of moderations/improvements that if approved, will result in improved uptake of the TREP and a wider reach of targeted beneficiaries. These improvements include:

• Strategic Partnership / Joint Venture with the key industry players such as Masisizane Fund, African Bank, Lulalend, Standard Bank and other key intermediaries within the sefa Wholesale Lending portfolio. Forging partnerships with the key stakeholders to develop accessible and innovative solutions that addresses client challenges has a potential of ensuring that TREP makes a developmental impact in the economy.
• 18 District Co-ordinators employed in those districts where uptake of DSBD products is low to work together with the Small Enterprise Development Agency (Seda) in the districts to assist with building a sizeable pipeline for all DSBD offerings.
• Increase TREP resources – Five (5) interns responsible for pre-screening new applications and establishing initial contact with applicants were employed. Increasing the number of TREP resources will enable the programme to improve its performance by increasing the number of approvals, disbursements, and impact numbers. Employing more people on a commission basis across various access points and co-locations particularly the rural space.
• Basic assessment to be conducted upfront by Compliance in relation to Financial Intelligence Centre Act (FICA), PIP and ITC to ensure that we consider bankable deals.
• Reduction of TREP requirements for deals below R350 000 – the qualifying criteria is cumbersome for starts-up and informal businesses. It is therefore imperative to review the TREP requirements particularly for small and upcoming businesses. Basis of on lending is purely based on the financial viability and repayment ability but that is different for start-ups and businesses operating in townships hence we need to review some of the TREP requirements.

The current review process is looking at the administrative, logistical, financial and legal ramifications of each of the proposed improvements to avoid any comeback and delays once the revised programme hits the market. These proposals are looked at through a phased approach and timelines range from 01 June 2023 – 31 March 2024.