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• Purpose• Government intervention in the small

business sector• Initial Small Business Policy• Respective Acts• Small Business Development Act• Financial support for small business• Technology Platforms

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• To appraise the Select Committee for Economic and Business Development on the existing policy perspective on small business development and financing to support economic growth, innovation and employment.

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• In March 1995 the new government released a policy on small business promotion, the country’s first as the initial realisation of the importance of the small business sector.

• The initial policy was reviewed in 2005 and culminated with the Integrated Strategy on the Promotion of Entrepreneurship and Small Enterprises, which led to the establishment of Seda

• The Cooperatives Development Strategy was also adopted in 2005 and led to the transfer of cooperatives Act from the Department of Agriculture

Primary legislation– Small business

Development Act (Act 112 of 1981)

– National Small Business Act 1996, amended 2004

– Companies Act, 2008– Cooperatives Act , 2013– Industrial Development

Corporation Act 1940– Financial Advisory and

Intermediary Services Act (37 of 2002)

Supplementary legislation & other policy measures

– BBBEE Act– National Empowerment Act, – Preferential Procurement

Policy Framework Act– Youth strategy– Women Development

empowerment strategy– Coops strategy– Innovation and technology

Strategy

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SEDA’s mandate is to provide non-financial business development and support services for small enterprise in partnership with other role players.

Strategic Objective 1:

Enhance competitiveness and capabilities of small enterprises

through coordinated services, programmes and projects.

Strategic Objective 2:

Ensure equitable access to business support services.

Strategic Objective 3:

Strengthen the organization to deliver on its mission.6

For survivalist and micro enterprises

Entrepreneurship awareness Franchise awareness

Business start-up training Business planning

Business registrations Business start-up advice

For small and medium enterprises

Access to local markets Access to export opportunities

Incubation Access to technology

Quality and standards testing, advice and

implementation

Hotline to assist with late payment of SMMEs

Business mentoring Facilitation of access to finance

For collectively owned enterprises

Social facilitation and mobilisation Cooperatives development and registration

Access to local markets All other relevant products and services still apply

For people with disabilities

Programmes with MODE, DeafSA and SANCB All other relevant products and services still apply

5 Seda as a non financial support programme Cont.

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Province

Seda Branches

Seda Satellite Offices

Seda Supported Incubators

Co-location Points

Mobile Units

Info Kiosks

EC 6 0 7 4 3 6

FS 5 2 1 0 5 3

GT 3 0 12 0 0 6

KZN 6 0 11 4 2 1

LP 5 0 2 4 3 1

MPU 5 0 5 7 0 14

NC 5 0 1 5 2 3

NW 5 0 1 5 4 6

WC 3 12 3 0 0 10

TOTAL 43 14 43 29 19 50

Seda as a non financial support programme Cont.

SEFA's mandate is to foster the establishment, survival and growth of SMMEs and contribute towards poverty alleviation and job creation.

The Small Enterprise Finance Agency provides funding through:

• Delivering Wholesale and Direct Lending credit facilities or products;

• Providing credit guarantees to SMMEs;

• Supporting the institutional strengthening of Financial Intermediaries so that they can effectively assist SMMEs;

• Creating strategic partnerships with a range of institutions for sustainable SMME development and support;

• Monitoring the effectiveness and impact of our financing, credit guarantee and capacity development activities; and

• Developing (through partnerships) innovative finance products, tools and channels to speed up increased market participation in the provision of affordable finance. 9

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The Direct Lending channel: Wholesale lending Channel

Working Capital Facilities Business Loans – (RFIs, Joint Venture Funds

Asset Finance Microfinance;

Term Loans Financing of Co-operatively owned enterprises

Term Loans Credit Guarantee Scheme;

Revolving Loans

Bridging Loans

Land Reform Empowerment Fund.

Short-term Trade Finance.

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The Direct Lending channel: Wholesale lending Channel

Sefa Wholesale Lending is through:

Finance Intermediaries R500-R5m

Sefa Direct Lending : Regional offices R50k-R5m

Credit Guarantee Schemes: Formal registered financial institutions

R5m

BREAKDOWN OF THE 46 407 SMMEs FUNDED AND THE R822 MILLION DISBURSED SINCE INCEPTION

• 10, 291 were youth owned enterprises with loan funding support to the value of R157 million;

• 44, 302 were women owned businesses with funding support to the value of R362 million;

• 36, 729 were rural-based enterprises with a total funding of R429 million; and

• 43, 643 were black owned enterprises funded to the value of R599 million.

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NEF Mandate

Established by the National Empowerment Fund Act No 105 of 1998, the NEF is a driver and a thought-leader in promoting and facilitating Black economic participation through the provision of financial and non-financial support to Black empowered businesses, as well as by promoting a culture of savings and investment among Black people

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NEF Mandate

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Over the years the NEF has implemented this mandate through two core divisions, namely Fund Management and Asset Management, whose respective functions and outputs are

outlined below:

Fund Management Asset Management

Facilitates financial and non-financial support for black enterprises requiring start-up, expansion and equity

acquisition finance ranging from R250 000 to R75 million

Promotes a culture of savings and investments and the universal understanding of equity ownership among

black peoplePre-Investment – business development, entrepreneurship development, including training & incubation support, product advisory services, administration of applications and deal-sourcing

Develop and support public-share offers aimed at facilitating black equity ownership in State-Owned Commercial Enterprises and the private sector, eg Asonge and Sasol Inzalo

iMbewu Fund – SME Fund supporting Entrepreneurship, Procurement & Franchise Finance

Provide Investor Education and promote financial literacy and understanding of the equities markets among black people

uMnotho Fund – supports funding of New Ventures, Acquisition, Project Finance, Expansion, Capital Markets, Liquidity & Warehousing needs

Champion Enterprise Development by enabling measured entities to contribute 3% of Net Profit After Tax (NPAT) to the growth of black SMEs countrywide    

Rural & Community Development Fund - supports rural economic development through New Ventures, Acquisition and Expansion Finance Strategic Projects Fund – supports early-stage investment in manufacturing transactions with export-earning potentialPost Investment – monitor the performance of NEF investees and provide ongoing mentorship support

Promote entrepreneurship and contribute to the creation of sustainable employment and the overall growth of an inclusive South African economy.

• The Department of Trade and Industry (the dti) and The Independent Development Corporation(IDC) entered into a Memorandum of Agreement dated on or about the 11 December 2006 (the MoA) pursuant to which the dti mandated the IDC to manage the budget support amount of 46 300 000 Euros (forty six million three hundred thousand euros) (“Risk Capital Facility 2, RCF2) on its behalf

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The Risk Capital Facility (RCF) objectives were/are to support the development of HDP controlled small and medium size enterprises (SMEs) with a significant HDP job creation impact, including female employment.

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The Direct Lending channel:

Niche Channel lending

Value of investments approved

R299 million

Value of investments approved : R155 million

Value of disbursements to date

R277 million

Total value of disbursements to date

R78 million

Average deal size R4.3 million

- -

Total value of investments facilitated

R1.5 billion

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RCF2 PORTFOLIOGeographic Spread

Gauteng : R123 million (27)

Western Cape : R 72 million (24)

Northern Cape : R 47 million ( 5)

Eastern Cape : R 41 million ( 7)

North West : R 8 million ( 5)

KwaZulu Natal : R 18 million ( 8)

Free State : R 11 million ( 3)

Mpumalanga : R 10 million ( 4)

Limpopo : R 2 million ( 1)

Priority AreasValue : 41%Number: 39%

RCF2 PORTFOLIOSector Exposure

Agro : R113 million (15)

Chemicals : R 46 million (13)

ICT : R 7 million ( 3)

Textiles : R 18 million ( 4)

Construction : R 28 million ( 9)

Franchising : R 11 million (13)

Green Industries : R 21 million ( 7)

Wood & Paper : R 9 million ( 3)

Media : R 34 million ( 4)

Transportation : R 7 million ( 2)

Metals : R 40 million (13)

Jobs

– 2,953

– 600

– 139

– 700

– 391

– 409

– 1,891

– 189

– 221

– 193

– 640

Total Jobs - 8 326

• The dti manages an array of incentives schemes which are grant funding in nature

• Amongst these incentives are those tailor made to support small businesses:

- Black Business Supplier development programme- Inceptive schemes for BPO programme - Incentives scheme related to Creative industries

i.e film

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Black Business Supplier Development Pprogramme 2012-Septemmber 2014 3 Years Historical Performance

Financial Year

No of Projects Approve

d

Approved Amounts Disbursements

2011/12 306 R96m R 52m2012/13 1212 R450m R129m2013/14 1066 R430m R291m

2585 R976m R472m

Subprojects under BBSDP

YEARNUMBER OF APPLICATIONS APPROVED

VALUE OF APPLICATIONS APPROVED

FEMALE MEMBERS

YOUTH MEMBERS

DISABLED MEMBERS DISBURSEMENT

2012/13 316 R 85 323 599 1 421 451 23 R 64 979 0002013/14 243 R62 037 729 990 253 24 R75 434 1702014/15 153 R42 401 418 381 167 9 R33 494 586

R 189 759 701

TOTAL SUMMARY OF PERFORMANCE 2012 – September 2014

TOTAL 712 2792 871 56 R 173 907 756

Cooperatives Incentive Scheme

Total approval as at 30 September 2014

53 Applications Approved

Qualifying South African Spend (QSAPE) =R 1,5 billion (R 1, 558, 258 048)

Incentive payable = R 409million (R 409, 246 880)

Payments as of 30 Sep = R164million (R 164, 125 101)

• Over the years technology platforms have been established for small businesses. Among these are Technology for Women in Business, Technology For Human Resource and Industrial Innovation, Special Project for Industrial Innovation, Seda Technology Programme (STP) and Technology Venture Capital the latter being funded through RCF reflows

• The aim of these platforms is to create a conducive environment and fund innovation and new inventions.

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• The aim of THRIP is to facilitate Enhanced industry competitiveness and broadened collaborations generating skills and technologies

• Leveraging collaborative partnerships on a cost-sharing basis, for research and development in science, engineering and technology, to produce highly skilled human resources and technology solutions, for improved industry competitiveness

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• The mission of the Seda Technology Programme is to develop innovative technology – based platforms that result in the creation of sustainable, globally competitive SMMEs that contribute towards the accelerated growth of our economy.

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• The Aim of SPII is promoting technology development and commercialization in South Africa

• Provides financial assistance for the development of commercially viable, innovative products and/or processes and facilitate commercialization of such technologies

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• Implemented parallel to the Seda Technology Programme (Stp) is the Incubation Support Programme (ISP).

• ISP was launched in September 2012 to encourage private sector partnerships with government to foster collaboration between small and big businesses; whereby big businesses assist SMMEs with skills and technology transfer; supplier development and market opportunities for SMMEs

• 42 applications have been approved with an approximate value of over R681 million. The value of claims paid is over R52 million. The number of claims paid is 24. Most approvals have been in the manufacturing and agriculture sectors

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Seda Technology Programme Q1 2014/15 performance

• The STP supported 2 349 clients compared to a targeted

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• 43 incubators were supported

• 344 jobs were created during the quarter under review

• 20 clients supported under the Technology transfer

programme

• 139 clients trained on national and international

standards

Province Approvals Sectors

Eastern Cape 4 ICT, films, agriculture

Free State 3 Multi-sectoral; jewellery, manufacturing

Gauteng 12 ICT, Automotive, energy, agriculture, manufacturing

KwaZulu-Natal 1 Clothing

Limpopo 3 Manufacturing

Mpumalanga 5 Mining, chemicals, agriculture

Northern Cape 3 Agriculture

North West 1 Construction

Western Cape 10 ICT, manufacturing, energy, clothing, agro-farming

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• This is a new programme created with the aim of providing a platform for technology innovations that are at the level of prototype development and commercialisation

• The programme is funded through RCF Reflows

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