Two agencies that fall under the Small Business Development Department had a lacklustre year and failed to reach their targets. The Small Enterprise Development Agency (Seda) achieved 12 of its 23 annual performance targets, while the Small Enterprise Finance Agency (Sefa) only reached five of its 17 annual targets.
The agencies support and fund SMMEs, which play a critical role in the economy. According to Seda, it was allocated R990-million and spent R773-million, which accounted for 78% of its budget. It said the Covid-19 pandemic was a reason it was unable to adapt quickly enough to service the more than 2.5 million registered SMMEs in the country.
It also blamed SMMEs that were not digitally savvy, for hampering its work to deliver services, including those in remote areas. Members of Parliament expressed concern about the performance of the agencies. And business consultant Derrick Ndzavi, agreed, saying the agencies and the government needed to do more to support SMMEs. “The most important question about this is how they can improve their digital platforms to assist the small businesses and ensure that this is done on a larger scale,” Ndzavi said.
“We cannot say that we can continue to rely on normal ways of consultation, as we need to find ways to do this digitally. “This also comes back to how SMMEs in rural areas do not have connectivity and are struggling with access to the internet, and how the government is ready to provide services like virtual consulting, where Seda and Sefa can consult with entrepreneurs online without them having to go to their offices, and how government can capacitate them to deliver on their mandates,” he said.
Ndzavi also warned that a proposed merger between the two agencies should be carefully considered. While those advocating for a merger believe it makes sense as the agencies serve the same market, others argue that entities must be kept apart as they specialise in different mandates. Sefa focuses on financial aid to SMMEs, while Seda offers nonfinancial assistance.
“It is very important to note that the merger must be concerned with improving services on the ground and also reducing the number of consultative platforms that entrepreneurs have to go through because it can get very confusing for entrepreneurs who end up not being sure whether they are assisted by Seda or SEFA,” Ndzavi said.
“It is also important to note that for the sake of allowing a straightforward approach, the Department of Small Business Development must not pursue the merger because there is a new minister that wants to show that (she)… is the new boss, but because it is part of a long-term policy plan that can be implemented for the benefit of the SMMEs they serve.”
