The Small Business Development Department plans on merging two agencies to make it easier for SMMEs to access support and financing. Small Business Development Deputy Minister Nokuzola Capa told Vutivi News that it made sense to join the Small Enterprise Development Agency and the Small Enterprise Finance Agency.
“When you have development agencies which are also development finance institutions and are meant for development, the issue you have of them doing the same work is problematic because the country needs to be cost-effective when doing service delivery,” she said.
“We also need to ensure that what is budgeted for is actually reaching the intended clients more than utilising (the allocated funds) for administration,” Capa said it was crucial that non-essential expenditure was reduced so that the department had more funds to help small businesses.
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She called on SMMEs to come to the party, accusing them and cooperatives of not using allocated funds to boost their businesses. “We have been supporting cooperatives and SMMEs, but what became clear to us was that when we gave these enterprises the equipment necessary to make their project operational, most of them tended to sell the equipment,” the deputy minister said.
“When we give them grants, we find that the cooperatives are no longer operating, and you can’t get hold of them. “We’re left with wasteful expenditure that we have to explain to The Treasury,” she said.
Capa said the merger would help deal with these issues. It would also streamline processes so that business owners were not sent from pillar to post. “Therefore, if you have SEDA as a stand-alone agency, and you look into what SEFA’s mandate is in implementing the Department of Small Business Development’s mandate, you find that they’re doing exactly the same thing,” she said.
“To avoid the confusion of clients going back and forth between SEDA and SEFA, the best solution would be to integrate and ensure that we retain as many essential services in order to maximise our budget service delivery plan and meet our target.”
Capa said the merger would also ensure that information needed by SMMEs was centralised. “This will be very helpful for small business entrepreneurs and cooperatives because they will not be sent to the wrong door,” she said.
“They will be referred to the necessary unit and necessary desk rather than going somewhere to do their business plan only to be referred to SEDA by SEFA because your business plan is not compliant with requirements.”
While the government wants 90% of new jobs to be created by SMMEs by 2030, most of them have warned that without the correct support, this target will not be realised.
