By: Tebogo Mokwena
Developing and sustaining SMMEs are becoming more crucial to deal with South Africa’s limping economy, and the Small Business Development Department has now outlined what it plans to do this year to give them the boost they need. It will focus on market concentration, barriers to entry, access to finance, and business development support. This follows President Cyril Ramaphosa’s State of the Nation address earlier this month where he announced that billions Of rand would be directed towards SMMEs.
Responding to Ramaphosa state of the nation address, Small Business Development Minister Stella Ndabeni-Abrahams presented the department’s plans and progress for SMMEs, and also outlined the work they would do to support the informal sector, including legislative measures. The department’s first strategy centres around mobilising and coordinating support across the SMME ecosystem. This is being achieved by the National Integrated Small Enterprise Development (NISED) strategy, which started being implemented last year.
Building generational wealth through family businesses
Celebrating Five Years of Empowering SMMEs
An exclusive event for entrepreneurs
by Vutivi Business News
The NISED Masterplan outlines the areas of intervention and the strategy the department will be undertaking to support small enterprise growth. The first strategy includes a focus on creating new start-ups, offering SMMEs and cooperatives recapitalised financing packages, introducing an enterprise supplier development scale-up programme, as well as expanding the Township and Rural Enterprise Programme. The department’s second strategy focuses on reducing red tape and regulatory blockages. In his previous State of the Nation Address, Ramaphosa announced the establishment of the Red Tape Reduction Task Force Team.
In the past, the department has been slammed by Parliament for not finding tangible solutions to bureaucratic hurdles. It was given until Wednesday to implement laws needed to address regulatory blockages. According to Ndabeni-Abrahams, the department was working on amending the Business Amendment Bill and had engaged with stakeholders on a municipal level to address regulatory restrictions through by-laws, permit fees and zoning. The department would also focus on providing small businesses with more appropriate financing products.
It has already assisted SMMEs through programmes like Amavulandlela, the Youth Challenge Fund (YCF) and the Township and Rural Enterprise Programme. The YCF is a youth start-up support programme intended to stimulate the establishment and growth of youth-owned businesses, promote digital skills, grow economy and foster job creation. It was launched last year. A number of interventions have also been put in place to address the credit gap to which SMMEs are subjected, which is believed to be worth over R350 billion.
These include an SMME-focused localisation programme, which has already disbursed R133 million in funding to 225 SMMEs in the 2022/23 financial period, Young Entrepreneurs Support which spent R630 million for SMMEs, as well as the Informal and Micro Enterprise Development Programme, which is a grant the department provides to informal and micro businesses. The department will also roll out a Power Purchase Package to assist SMMEs plagued by load-shedding and will partner with the government’s National Skills Fund to train 14,000 entrepreneurs. Almost R600-million has been approved for the training project.
