THE NATIONAL ASSEMBLY
QUESTION FOR ORAL REPLY
34. Mr S J Mohai (ANC) to ask the Minister of Trade and Industry:
What (a) has been his departmentâs strategy to (i) support small
businesses and co-operatives in terms of legislation and regulations
and (ii) harness the actual and optimal potential of small and medium
enterprises and co-operatives in terms of job creation as a priority,
(b) has been the impact of this strategy on the growth of small
businesses and co-operatives as a result and (c) investment
opportunities area available to poor and rural communities? NO244E
Reply
a) (i and ii) The Department of Trade and Industry is guided by the
Integrated Strategy on the promotion of entrepreneurship and small
enterprises as well as the Integrated Strategy on the Development and
Promotion of Co-operatives. These Strategies mainly focus on the
provision of non-financial and financial support services, access to
markets and the reduction of regulatory constraints.
Small business strategy
Government has primarily two institutions, the Small Enterprise
Development Agency which focuses on the delivery of non-financial
support services and the Small Enterprise Finance Agency (Sefa) which
focuses on financial support services.
Non-financial support services include potential entrepreneurs who
start and run businesses and these get assisted with general business
management skills which include financial management, marketing,
strategic management, business planning, human resources, quality
assurance, export readiness and other support services.
In the area of access to markets, the dti provides incentives such as
the Export Marketing and Investment Assistance which supports SMMEs
that are export ready to showcase their products to the international
markets as well as the Incubation Support Programme which requires
participating big businesses to transfer skills to small businesses
(their incubatees) and provide them with procurement opportunities.
The Sector Specific Assistance Scheme (SSAS) provides for generic and
project funding support for emerging exporters.
In the area of reducing regulatory constraints, the dti launched a red
tape reduction programme in collaboration with the Department of Co-
operative Governance to target local municipalities so that they could
reduce administrative processes and regulations on small businesses.
Through its support programmes the dti also provides incentives to
small businesses such as the Black Business Supplier Development
Programme and the Manufacturing Competitiveness Enhancement Programme
and these incentives include provision of machinery, tools and
equipment needed by small businesses to run successful and growing
businesses. the dti furthermore provides for a 100% grant to majority
black owned primary co-operatives to improve the viability and
competitiveness of co-operative enterprises by lowering their cost of
doing business through its Co-operatives Incentive Scheme (CIS).
Co-operatives strategy
Co-operatives Amendment Act 2013 assented to by the President on 5
August 2013 aims to (1) strengthen co-operativeâs governance,
accountability and transparency and to provide for a differential
dispensation for co-operatives to reduce the regulatory burden. (2)
enhance compliance, coordination, administration and sustainability of
co-operatives; and (3) establish co-operatives institutions to
streamline alignment across all spheres of government.
Co-operatives Amendment Act 2013 and its regulations will provide an
enabling environment to support the optimal development of co-
operatives to ensure the creation of sustainable job opportunities.
This Act calls for the establishment of a Co-operative Development
Agency that will provide tailor made non-financial support to Co-
operatives, as well as a Co-operatives Tribunal that will assist co-
operatives with judicial management, winding-up, deregulation,
conflict resolution, the liquidation and to conduct investigations
into the activities of co-operatives to ensure compliance with
legislative requirements.
the dti is also strengthening the economic viability of primary co-
operatives through the establishment of secondary marketing co-
operatives that creates investment opportunities for small scale
farmers and primary co-operatives. An incentive has been designed to
support the establishment of secondary marketing co-operatives.
b) The impact of the Strategies on small businesses and co-operatives has
been positive. In the 2012/13 financial period, 68 850 potential and
operational small enterprises accessed the various Seda network points
on business development matters in each province. Approximately 10 208
new and existing enterprises received a Seda intervention. Of these
enterprises, 44.5% were youth owned and 1.6% were entrepreneurs with
disability. Fifty nine percent (59%) of the existing Seda clients were
in the services sectors, followed by 14% in the manufacturing sector
and 13% in agriculture. It is encouraging that both the manufacturing
sector and agriculture have seen an increase in the number of
enterprises assisted compared to the 2011/12 financial period at 10%
and 9%, respectively. This shows that more and more enterprises in
these priority sectors are receiving support, which should spell good
news for industrialising the economy.
The SMME Payment Assistance Hotline facilitated payments to small
businesses exceeding R350 million. The roll-out of the incubation
programme was enhanced with an additional approval of 23 incubators by
the end of March 2013 for both the Seda Technology Programme (Stp) and
the Incubation Support Programme (ISP). From the beginning of 2013/14
financial year, 33 new incubation projects had been approved under the
Incubation Support Programme. The Stp produced a total of 2 301 jobs
by the end of March 2013.
The total number of co-operative projects that benefited from CIS
increased from 157 projects at a total value of R45.7 million in
2011/12 to 316 projects at a total value of R85.5 million in 2012/13.
c) The dti has finalised the development of the National Informal
Business Upliftment Strategy and its instruments. This Strategy
targets the lower end of the market including street traders, spaza
shops, township and rural enterprises. It is envisaged that this
strategy and its instruments will, to a great extent, uplift poor and
rural enterprises. Other investment opportunities available to poor
and rural communities include micro franchise business opportunities,
industrial clustering, local economic development, infrastructure
development, supplier development programme driven by the dti in
collaboration with State Owned Entities, co-location and one stop
shops to bring business support services closer to rural and remote
areas.