Small business owners and those who want to set out on their own, will soon have additional support with the government planning on setting up the Small Business Development Agency across the country.
In her 2021-2022 budget speech, Small Business Minister Khumbudzo Ntshavheni revealed how the department’s budget would be used to strengthen the presence of the Small Enterprise Development Agency (Seda), in order to provide funding and crucial services, develop incubation hubs, and create new markets for SMMEs to trade successfully.
Ntshavheni said this week that her R2.5-billion budget tabled for her department and its various organs would go a long way in realising the goals of the NDP by 2030.
Building generational wealth through family businesses
Celebrating Five Years of Empowering SMMEs
An exclusive event for entrepreneurs
by Vutivi Business News
Ntshavheni said that R138-million had been allocated to sector and market development, R1.3-billion to finance development, and R900-million to enterprise development.
The budget has allocated R868-million of transfers and subsidies to the Small Enterprise Development Agency. “Of this, R666-million is allocated for the strengthening and expansion of Seda’s presence across the country with a goal of maintaining a Seda office in each district of our country,” the minister announced.
“Seda has been assisting entrepreneurs to complete various applications including business registrations with the Companies and Intellectual Property Commission, the South African Revenue Service and the Unemployment Insurance Fund.”
Since 2019, 70,512 entrepreneurs had visited Seda offices for support, she said. Ntshavheni said R157-million was allocated to the Seda Technology Programme to help set up incubation and digital hubs. The department has a target of establishing 250 hubs by 2024.
“Seda will also facilitate the establishment of an additional 27 new incubators, mainly in the township and rural areas,” she said. “The new incubators will assist with the establishment of approximately 1290 new enterprises that are expected to create at least 25,000 jobs.”
Ntshavheni said that some of the districts earmarked for the incubators included Sedibeng in Gauteng, Umgungundlovu in KwaZulu-Natal and Mopani in Limpopo. The budget also allocated R1.25-billion of the transfers and subsidies to the Small Enterprise Finance Agency to implement the Small Enterprise Manufacturing Support Programme (SEMSP).
It would help build the SMME-focused Localisation Programme, the Township and Rural Entrepreneurship Programme and SMME financial intermediaries who would be direct lenders to small businesses and co-operatives.
The minister said this was the department’s contribution to transforming the financial service sector, which has a history of not supporting SMMEs. The department would also coordinate efforts to support SMMEs to scale up their businesses and survive beyond their first five years, providing easy-access markets for them.
“The SMME Business Infrastructure Support is aimed at providing SMMEs including co-operatives with affordable and safe areas to produce, market and sell their goods and services, and to create business hubs for the surrounding primary producers in the area in order to stimulate economic activity in the districts,” she said.
Ntshavheni said that this would be achieved through business infrastructure like pop-up markets, trade markets, open markets, retail space sharing and manufacturing shared facilities. Around R288-million had been set aside for the Business Viability Programme, which the minister said would assist businesses to expand and help them turn around their operations, including those in financial distress.
“Most small businesses struggle to access finance due to perceived risk identified by the lenders,” she said. “The department will soon table the Draft SMME Funding Policy of South Africa for public comments. This draft policy seeks to make proposals on the coordination of SMME funding across the public and private sector.”
