By: Anna Majavu
Small, rural entrepreneurs in the clothing manufacturing business are being held back by an exclusionary development finance model, according to the Commission for Gender Equality. CGE CEO Phelisa Nkomo told Vutivi News that the government seemed “unable to use some of its resources to make sure that it facilitates access to credit” for the mainly women-owned businesses that made and sold their clothes locally.
“The development finance model that we are using is not only exclusionary but also there is a lot of conscious and unconscious gender bias. The type of risk profile that gets applied is also exclusionary because it requires people to have collateral. Development finance institutions are not playing their developmental role” Nkomo added. Recent research by Unisa academics Lucy Maliwichi, Mulatedzi Manenzhe-Ramarope, and Mariette Strydom into 200 small-scale business owners from Thohoyandou and Nzhelele, found that nearly 33% were engaged in small-scale apparel manufacturing with the clothing being sold locally.
Building generational wealth through family businesses
Celebrating Five Years of Empowering SMMEs
An exclusive event for entrepreneurs
by Vutivi Business News
But the support these women-owned businesses received “falls short of the actual needs of the entrepreneurs”. A government-run SME bank and government-facilitated land for small business premises were needed, they said. Vanessa Pillay, who is the Organisation and Representation Programme Coordinator for Africa in the Women in Informal Employment Globalising and Organising (Wiego) non-profit organisation, said home-based workers assumed all the risks of being independent operators.
“They buy their own raw materials, supplies and equipment and pay utility and transport costs. They usually sell their goods and services locally, but sometimes sell to international markets,” she said. Wiego found that local economic development officials in municipalities across Limpopo, Mpumalanga and the Eastern Cape keep a database of enterprises and cooperatives supposedly to provide economic support and integrate them into local economic development programmes.
“However, there is either no clear integration plan or budget (to do so),” Pillay said. Ubuntunomics owner, and sustainability practitioner Sibusiso Nyathi, said the government’s early 2000s Vuk’uzenzele programme, which supported rural women with funding for sewing machines and material and training, was more effective than the current commercially focussed finance model. “Funding institutions and commercial banks are export-oriented when it comes to the clothing/textiles industry, not geared towards local consumption,” said Nyathi.
“They think big concepts like extensive production incentives, competitive programs, industrial innovation, etc. Even though these funders talk about equitable and socially responsible, their funding models are exclusionary, and the commercial motive is central,” said Nyathi. He said the government’s Small Enterprise Development Agency and Small Enterprise Finance Agency must concentrate more on localisation initiatives if small, women-owned clothing manufacturers, who were often the sole person working in their business, were to benefit. “SEDA and SEFA must play the important role of linking small sewers with local schools to get orders for making school uniforms in their local area. The sustainability of small sewers depends on a rethink of models to suit local dynamics,” added Nyathi.
