Sefa’s Offerings and Current Programmes for Small
Businesses & Co-operatives
Mr Thakhani Makhuvha - CEO
24th August 2017
Presentation Outline
1. Overview of sefa
2. The Role of SMMEs & Co-operatives in addressing Policy Imperatives & financial inclusion
3. Sefa operations
4. Developmental impact
5. Case studies: Clients financed by sefa participating in the medical field
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Overview of sefa
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Introducing sefa
Established April 2012 (merged entity)
Corporate Type State-owned Company registered in terms of the Companies Act
Executive Authority Department of Small Business Development (DSBD)
(MoU between EDD & DSBD)
Shareholding 100% owned by the Industrial Development Corporation Limited (IDC)
Major Funding Sources SA Government & IDC
Mandate To be the leading catalyst for development of sustainable SMMEs
and Cooperatives through the provision of finance
Number of employees 239
Governance
Schedule 2 under the PFMA, similar to the shareholder’s, the IDC.
Follows normal company policies and procedures in compliance with the
PFMA & the Companies Act, amongst others
Unqualified audit opinion since establishment
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Role of SMMEs and Co-operatives in addressing Policy Imperatives & financial inclusion
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SMMEs - important policy instrument
1. National Development Plan (2012)
− NDP target to create 11 million jobs by 2030.
− SMMEs to create 90% of job opportunities.
− Public and private procurement to stimulate demand for SMMEs products
and services
2. Industrial Policy Action Plan (2015/16 – 2017/18)
− Prioritisation of labour intensive sectors with the view to increase job
opportunities; increasing their participation in global value chains and
broadening economic participation.
3. Nine Point Plan (2015)
− Unlock the potential of SMMEs and Cooperatives, township and rural
enterprises (Point 7).
Support to the informal sector
30% set-aside policy to support SMMEs and cooperatives.
4. 14-Point Economic Recovery Plan (2017)
– In an endeavor to promote an inclusive growth and achieve
NDP’s Vision 2030, the government proposed 14 interventions
across various economic sectors and more collaboration
between the state and the private sector.
Unemployment
Poverty
Inequality
…addressing
SMMEs policy implementation is
informed by the White Paper (1995),
National Small Business Act (1996) & the
Integrated Small Business Development
Strategy.
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sefa objectives and SMME Challenges
Access to finance and credit
Poor physical infrastructure
Low levels of research &
development
Weak linkages between small and
larger firms
Onerous labour laws
Inadequate educated workforce
Ineffective government
bureaucracy
High level of crime
Lack of access to markets
Most local SMMEs seldom survive beyond their nascent phases, lasting for an average
of less than 3.5 years. 7
sefa was established to: Challenges faced by SMMEs
provide access to finance in an efficient and
sustainable manner to the local SMMEs,
issue wholesale lending to financial intermediaries &
direct lending SMMEs and Co-operatives,
provide credit guarantee(s) to financial institutions &
suppliers that issue funding to SMMEs and Co-
operatives,
facilitate, promote, guide & assist in the financing of:
• new & existing SMMEs,
• Schemes for the expansion, better organisation
& modernization of the more efficient
undertaking of operations in existing SMMEs &
Co-operatives,
stimulate economic empowerment of the historically
disadvantaged communities & persons,
encourage the creation and growth of new
knowledge-based SMMEs & Co-operatives.
sefa operations
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Strategic & operational principles
Market Failure
Catalytic & unlocking latent potential
Transformative & inclusive
Partnership
Target most vulnerable
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Strategic focus areas
Services (including retail, wholesale and tourism)
Manufacturing (including agro-processing)
Agriculture (especially land reform beneficiaries and contract-farming activities)
Construction (small construction contractors)
Mining (specifically small miners)
Green industries (renewable energy, waste and recycling management)
In the followings strategic sectors of the economy:
Targeted % of disbursements
• black entrepreneurs 70%
• women 45%
• Youth 30%
• people in rural communities and townships 45%
• people living with disabilities 2%
Targeted ownership groups:
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High appetite for risk in exchange for high developmental impact
Provision of capital and/or interest moratorium up to 12 months (for term loans)
Financing SMMEs including start up businesses that are often perceived as high risk
Addressing the financing gap for loans below R500k
Provision of pre and post loan business support
Provision of funding to entrepreneurs with adverse credit records provided they
can demonstrate active remedy of their indebtedness
Lending not solely based on security backing
Specific focus on targeted groups
Own contribution dependent on entrepreneurs financial ability
Strategic differentiation
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Lending model
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Equity
Products & Services
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Fund Management Services
In granting loan financing to qualifying businesses, the applicant must
be a South African citizen and permanent resident
be a legally registered* with fixed physical address
be within the required contractual capacity
be registered and operate in South Africa
have a written proposal or business plan that meets the
requirements of sefa’s loan application criteria
be a majority shareholder as the owner manager of the business
have provided personal and/or credit references (if available)
have a valid Tax Clearance Certificate
Loan criteria
* Referring to direct clients 14
Developmental Impact
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Funding activities
2012/13 2013/14 2014/15 2015 /16
440
1,065 1,009
1,109
198
822
1,294
1,168
Approvals & Disbursements
(R’million)
Cumulative Approvals – R3,6 bn
Cumulative disbursements – R3,4 bn
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Development impact
2012/13 2013/14 2014/15 2015 /16
Enterprises funded & Jobs facilitated
• Enterprises Funded – 193 320
• Jobs Facilitated – 202 876
28,362
46,407
68,724
54,833
19,853
46,402
60,169
75,670
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Development impact (% of disbursements)
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2013 2014 2015 2016
Youth-owned
enterprises 16% 21% 23% 24% R275m
Women-owned businesses
39% 49% 37% 41% R474m
Black-owned businesses 78% 81% 74% 79% R923m
Facilities less than R250K 45% 34% 21% 24% R281m
Enterprises owned by
People with Disabilities Not measured 0% 1%
R8.5m
Case Studies
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Renal Care Team Inc
• Renal Care Team Inc. is a start up business situated in KwaMashu. The business caters for the medical needs in the area.
• The services offered are high quality haemodialysis treatment and patient care to chronic renal failure patients. Most patients undergo haemodialysis treatment thrice a week at the cost of about R2500 per visit. Each session takes 4 hours. (Bear in mind that kidneys work 24hrs a day).
• The applicants contacted sefa after searching the internet to access funding for start-up businesses.
• sefa funding is assisting a black youth and black female to get into business for the first time. Three new employment positions initially will be created, as the unit grows, more jobs will be created.
• The unit is a much needed service catering for the Inanda, KwaMashu and Ntuzuma area. It is the first , the renal unit in the area and is equipped with state of the art equipment.
• The unit will eventually have 8 dialysis machine which should suffice to cater for the community demand. Renal failure over the years has increased and there is currently a shortage of units especially at KwaMashu.
Key information
• Location: KwaMashu
KwaZulu Natal
• Job creation: 3 jobs
• Funding amount: R2 763 594
• Sector: Medical
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Deline Investments
• The company is 100% owned by Maropeng Modiba
Family Trust
• The directors have extensive experience in the
management of retail pharmacy business and have been
in the industry for the past 18 years.
• The vision of this company is to become a leading retail
pharmacy group in Limpopo province, representing the
pride of young black entrepreneurs in the profession of
pharmacy
• The company intend to take pharmaceutical care where
it did not previously exist, in line with the government’s
intentions and objectives
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Key information • Location: Polokwane
• Job creation: 15 jobs
• Funding amount: R900 000
• Sector: Pharmaceutical
Rite-Care Pharmacy T/A Parks-Med
• The business is 100% black owned by Aluwani
Mulingwe, who is a Pharmacist.
• Rite – Care Pharmacy was registered in 2012 for the
provision of prescription and non–prescription
medications to the members of the general public.
• The client is a repeat sefa client who had been
funded in 2013 for R496,790 to open up a Pharmacy
in Ladanna, Polokwane. This loan was repaid in
December 2014.
• The client approached sefa for a R498,913 loan to
.expand his business with a store in the Corner
Church and Marshall Streets in Polokwane.
• The business is one of the national Gazelles that has
been identified by DSBD
• No mentor was appointed for this client.
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KEY INFORMATION • Location: Limpopo, Polokwane
• Jobs created and maintained: 8
• Funding amount: R498,913
• Sector: Pharmaceutical
TC Pharmacy (Pty) Ltd
• TC Pharmacy (Pty) Ltd is a private company formed in
2012. The company is owned by two brothers Messrs’
Tinyiko Gift Mangolele and Stanley Mangolele with 70%
and 30% shareholding respectively. Mr. Tinyiko Gift
Mangolele is the manager of the business. He is
knowledgeable and has pharmaceutical industry
experience.
• Business Description: Pharmaceutical
• The client heard about from seda.
• A loan amounting to R490 000.00 was approved to
establish a new retail community pharmacy business in
Malamulele Township. No mentor was recommended
for the client. .
• The company is owned by two black brothers and is
situated at Malamulele Township approximately 193 km
North - East of Polokwane. The project created 7
permanent jobs.
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Key information • Location: Limpopo & Malamulele
• Job creation: 7 jobs
• Funding amount: R490 000
• Sector: Pharmaceuticals
Lethabo Radiology
• Lethabo Radiology (Pty) Ltd was registered in 2012 and been in
operation for the past year and 9 months
• The company is 100% black youth and woman owned by Ms
Ntsoaki Maria Molai. This is an existing business wanting to
expand. In the expansion plan the owner wants to procure two
additional equipment for a new practice that will be opening in
Belfast
• The current Practice is based in Middelburg in a township called
Mhluzi
• Lethabo Radiology (Pty) Ltd is currently providing X-ray and
Ultra Sound services and with this expansion, it will be providing
the same services in Belfast
• sefa has approved a loan to the tune of R1.5m to finance the
procurement of a set of X-Ray and Ultra Sound Equipment as
well as 3 months working capital
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Key information • Location: Mpumalanga, Middelburg/
Mhluzi.
• Job creation: 2
• Funding amount: R 1 535 794.40
• Sector: X Ray and Ultra Sound Services.
Xolisa Menemene Radiographers (Pty) Ltd
• Xolisa Menemene Radiographers (Pty) Ltd is a new company
registered in 2015 and will provide x-ray images and report
services to doctors and patients in the township of Kwa-Dwesi
in Port Elizabeth.
• The company is 100% owned by Mr. Xolisa Menemene a
qualified Diagnostic radiographer with 7 years’ experience.
• The owner saw an opportunity of a lack of radiographers in the
townships of Port Elizabeth and established the x-ray imaging
business to be based in a township
• The owner resigned from his job at a government hospital to
put his financial resources into to business for renovating the
premises and to buy equipment.
• The funding from sefa was used to acquire the x-ray machines
and provide working capital
• Additional support from sefa came in form mentorship at no
cost to the client
Key information • Location: Kwa Dwesi Port Elizabeth
• Job creation: maintained 1 and
created 1
• Funding amount: R 778 000
• Sector: Health care &
Pharmaceuticals
• Youth owned
NP Xray Services (Pty) Ltd
• NP XRay Services is a 100% black female-youth -owned
business by Ms. Nqobile Mpinga. Ms Mpinga is a qualified
radiographer registered with the Health Professions
Council of South Africa.
• NP XRay Services started operating in October 2014
on a small scale. After a year of operating Ms Mpinga
saw an opportunity to grow the business as there was
demand for her services in the Matatiele area. She was
the only private x-ray practice in the area.
• Once she identified an opportunity to grow the
practice, she approached sefa for a loan of R 1 206 909
to start a private x-ray practice. She got financial
assistance from sefa and now she is the only female
youth radiographer in Matatiele and has created 3 jobs
so far.
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Key information • Location: Matatiele
• Job creation: 3 jobs
• Funding amount: R 1 206 909
• Sector: medical services
Elukwatini Radiology (Pty) Ltd.
• A young man of 32 years of age has been passionate about
opening his own radiographer practice.
• He formally registered a business called Elukwatini Radiology
(Pty) LTD which is a 100% black youth owned.
• His passion for the business drove him to even resign from
his employment (Embuleni Hospital) to pursue the business
on full time basis.
• The client needed an investment partner who would believe
in his idea after having knocked with failure from few
commercial banks.
• Sefa has become an answer to the entrepreneur’s prayers by
approving a start-up loan of R909 728 to buy the X-Ray
machine and other equipment's, to finance working capital of
the business and also renovate the premises to accepted
standards of this type of business.
• Sefa’s investment will be instrumental in the development of
black owned businesses and also creation of 2 permanent
employment.
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Key information • Location : Elukwatini
• Job creation : 2
• Funding amount: R 909 728
• Sector: Medical (Radiographer practice)
Dr L Booysen Medical Practioner
• Dr Booysen is a qualified female doctor who grew up
and completed her high school in Graaff-Reinet. After
matric she then went to University of Free State to
study Baccalaureus Scientiae (Biochemistry ) and did
Bachelors of medicine and surgery at University of
Pretoria.
• After completing her community services she went
back to Graaf Reinet to work at a Hospital as Grade 1
Medical Officer . She practiced for 3 years as a Medical
Officer.
• Due to the lack of private doctors in Graaff-Reinet , she
has identified an opportunity to serve Graaff-Reinet and
the surrounding areas. She approached sefa for a loan of
R797 945 to start a private medical general practitioner.
She got financial assistance from sefa and now she is
the first female youth doctor in Graaf Reinet and she
has created 4 jobs so far.
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Key information • Location: GRAAF -REINET
• Job creation: 4 jobs
• Funding amount: R 797 945
• Sector: MEDICAL PRACTIONER
Thank you 29