OVERVIEW Development
OVERVIEW Development finance and SMME support Government pledges to spend R4-billion with SMMEs annually. Credit: 5M2T. In a drive to spur economic development in Gauteng’s townships, a Township Economic Development Bill will do away with restrictive bylaws. At the same time, taxi ranks are going to be rezoned and developed to allow for the growth of retail outlets and services such as mechanics and panel-beaters. Data company 5M2T (Five minutes to town) has started offering sophisticated information about the township market. From how many spazas in Soweto have refrigeration units (4 700) to brand loyalty, 5M2T covers 60 000 spazas, salons, barbers and other informal trade outlets in an “in-market audit”. Gauteng has 14 registered co-operative banking institutions serving over 16 000 member-owners, with over R100-million in savings and R150-million in assets. The township market of about 250 000 township households holds enormous potential for collective buying. The Gauteng Growth and Development Agency (GGDA) is linking large companies with small businesses at Special Economic Zones (SEZs). The aim is to create a pipeline for SMMEs and to entrench localisation in sectors such as the automotive industry. The Incubation Centre at Nissan’s assembly plant in Rosslyn north of Pretoria hosts eight new businesses at a time. They receive support through subsidised rental and mentorship and training. The Automotive Industry Development Centre (AIDC), a subsidiary of the Gauteng Growth and Development Agency (GGDA), SECTOR INSIGHT A Township Economic Development Bill aims to reduce red tape. manages the centre. The Jobs Fund contributes to financing the project. The City of Johannesburg runs seven SMME hubs where office space, WiFi and advice and training are available for small business operators. About half of South Africa’s formal SMMEs operate in Gauteng and more than half are in the wholesale and retail sector and the accommodation sector. The next most popular sectors are community, social and personal services. The Provincial Government of Gauteng has pledged to GAUTENG BUSINESS 2020/21 44
OVERVIEW spend R4-billion per annum on goods and services through 2 000 township businesses. Over the five years to 2025, there will also be support for 500 co-operatives and for 50 emerging black farmers and 20 black agro-processors to scale up their businesses. The National Department of Small Business Development (DSBD) has several programmes to assist SMMEs and co-operatives. These include: • The Black Business Supplier Development Programme, a costsharing grant to promote competitiveness • The Co-operative Incentive Scheme, a 100% grant. The Small Enterprise Development Agency (Seda) is a subsidiary of the DSDB and gives non-financial support to entrepreneurs through training, assistance with filling in forms, marketing and creating business plans. It helps small businesses draft applications for loan finance. Several of Seda’s technology incubators are in Gauteng. The National Gazelles is a national SMME accelerator jointly funded by Seda and the DSBD. Businesses can receive up to R1-million for training, productivity advice, business skills development and the purchase of equipment on the Gazelles programme. The Industrial Development Corporation (IDC) supports SMMEs either by disbursing loans or by taking minority shares in enterprises and giving advice. The National Department of Labour has a programme to support people with disabilities, the Sheltered Employment Factories initiative. The Enterprise Investment Programme (EIP) of the National Department of Trade, Industry and Competition (dtic) is another support programme. The Shanduka Black Umbrellas incubator helps entrepreneurs convert their good ideas to sustainable business practice. Private sector Agribusiness and agro-processing are among the sectors that are targeted by the Masisizane Fund for loan financing. The others are franchising/commercial and supply chain/manufacturing. Training is offered through a Business Accelerator Programme. As a nonprofit initiative of the Old Mutual Group, the fund focusses on the cash flow of potential businesses rather than insisting on security in the form of property. ONLINE RESOURCES Gauteng Growth and Development Agency: www.ggda.co.za National Empowerment Fund: www.nefcorp.co.za Small Enterprise Development Agency: www.seda.co.za All the major banks have SMME offerings. Standard Bank’s Community Investment Fund (CIF) initiative extends loans to informal businesses. The CIF has distributed more than R7-million to more than 630 businesses through its six funds in three provinces. Nedbank has an enterprisedevelopment product that supports businesses with a turnover up to R35-million with at least 25% black ownership. Private companies also support SMMEs through their buying chain. Woolworths is funding TechnoServe to ensure that small tomato growers can grow produce that will meet the demanding standards of the retailer, and to help them expand production. A regular supplier to Woolworths, Qutom, assists with the project. The Shanduka Black Umbrellas incubator helps entrepreneurs convert their good ideas to sustainable business practice. DRA Minerals is putting R3.8-million into the programme over two years. Anglo American Zimele, which runs four enterprise development and investment funds, helps start and expand SMMEs. Since the introduction of enterprise hubs, the number of projects has grown very quickly and Zimele has processed more than R500-million in loans and two applications are received every day. One of Zimele’s small business hubs operates out of Vanderbijlpark. ■ 45 GAUTENG BUSINESS 2020/21
