KwaZulu-Natal Business 2016-17 edition

INTERVIEW MASISIZANE

INTERVIEW MASISIZANE FUND Masisizane Fund: empowering small enterprise BUILDING SUSTAINABLE BUSINESSES THROUGH SUCCESSFUL PARTNERSHIPS Sifiso Myeni, the KwaZulu-Natal Provincial Manager of the Masisizane Fund, sees huge potential for the growth of SMMEs, with collaboration of private and public sectors. Please could you give us an overview of the Masisizane partnerships with Omnia, Gra Sifiso Myeni Fund’s work in KwaZulu-Natal? Association and municipalities, th their planting significantly in 2014 Masisizane has invested over R60-million and funded more channeled than towards Grain Co as 50 clients in the province. The Fund’s role is so much more than The Masisizane Fund (NPC), is an initiative just giving of Old loans Mutual – South a key Africa, component established of our work is helping Masisizane small opera in 2007 following the closure of the Unclaimed business Shares owners Trust. This to find was done solutions in consultation for ways in which they nationally can grow with it with the National Treasury of South Africa. The mandate of the Fund at inception was their businesses. We also work with partners such as the provincial Gauteng and r and remains to contribute meaningfully to employment creation, poverty eradication and national government, in addition to their own development offices in KwaZu and reduction of inequality, economic growth and the attraction of investment. This is BIOGRAPHY agencies. Through these relationships we have been able Limpopo, to ensure Eastern done mainly through promotion of entrepreneurship, enterprise finance and support to that more resources are being made available to SMMEs. Although small, micro and medium enterprises (SMME’s). Western Cape. Sifi so Myeni is the Masisizane we only have one office in the province, which is located in Durban, The process to follow when apply Fund’s KwaZulu-Natal Provincial Manager. Previously he Some interesting case studies that we are particularly Submit proud the following of documents fo we cover the entire KZN province and will assist wherever from we the can. Masisizane Fund is: The Fund provides loan finance in the following sectors: • Agriculture relevant provincial office: was the Head of Agribusiness relate • Manufacturing to businesses such as City of Choice Travel and Tours, which is • Comprehensive business plan • Supply Chain Development and a member of a business that, like many others, started from humble beginnings. projections; • Franchising the Old Mutual Masisizane Fund In its early stages this business was operating from a garage • For established yet businesses – • Commercial Enterprise three years) and the latest man Executive Management Team. managing to create a turnover of close to R1-million per annum. Non-financial value adding services include capacity • For start-up businesses – financ His career started in 2000 with Through the dedication of its entrepreneur – as well as the financial development, business management and technical support, • Tax clearance certificate; the SA Sugarcane Research and non-financial education, assistance market development from and the product/ Masisizane Fund –• the Off take business agreements and/or l Institute, and in 2005 he joined the Organic Farms Group and in 2009 he joined the Old Mutual Masisizane Fund. He obtained his B.Sc Agriculture Degree from the University of Zululand and his Master’s Degree in Sustainable Agriculture from the University of the Free State. He is a 2nd-year PhD student with UKZN. service has quality grown standards to the and point compliance. where A it Business now has turnover • figures Signed consent in for a credit ch excess of R30-million. Another interesting case relates to the agri-cluster model that Masisizane is implementing within the agriculture space. This approach has necessitated the collaboration of other stakeholders. It is through the meaningful collaboration of the private and public sector that we were able to finance five co-operatives within the Mzimkhulu area. These farmers were financed with inputs, tractors and working capital to enable them to plant, cultivate and sell soya beans. To date the project has been working well, albeit the harsh climate conditions have stunted the anticipated results. Over R34-million has been invested in this project The target market is enterprises that are 51% or more owned by the previously disadvantaged individual(s) giving priority to rural and peri-urban/township areas. Masisizane funding is biased towards 51% plus owned women, youth and people with disabilities. Masisizane will target productive and labour absorbing sectors as approved by the Board of Directors from time to time. The Fund’s success is driven through a focused approach on high impact industry sectors, coupled with a comprehensive SMME finance solution that includes business support. Acceleration Program has been e clients receive training and suppo eligible to receive financial suppo The growth of the Masisizane Fu inception. Although the initial foc the fund has gradually grown to b fund with the vision of being able as a sustainable entity and thereb for many years to come. The fu R1b and it plans to invest R420 SMME’s by the end of 2017. The development of agri-clusters Masisizane Fund’s approach in entail the clustering of small sca the farmers benefit from economi on value chain financing, agro-p partnerships. In 2013 the Fund initiated a p Harry Gwala municipalities co trading in grain and dairy prod focused on development of value mechanization, storage and micro KWAZULU-NATAL BUSINESS 2016/17 48

INTERVIEW alone on a 50:50 basis (half comprised of a loan from the Masisizane Fund and the other half as a grant from the KZN Department of Agriculture and Rural Development). The project has created more than 150 job opportunities, including seasonal workers, and more jobs will be created as we expand from 1 500 hectares to 3 000 hectares in the next two years. Could you offer some insight into the focus of your agribusiness development unit? The Masisizane agribusiness development unit consists of dedicated, experienced hands-on individuals who are tasked to ensure the successful running of the Masisizane Fund’s investment into the agri-clusters and turnkey solutions. The agriunit is responsible for six specific functions: • Establishment of Agri-Clusters. • Value chain-orientated development in agriclusters. • Partnerships and leveraging on partner programmes – grants, loans and technical expertise. • Sector intelligence, which includes providing technical expertise to pre- and post-investment units, markets trends and so on. • Turnkey solutions. • Managing the agri-loan book. The implementation of the flagship initiative started in earnest in 2015, when an amount of R100-million was approved to be disbursed over a three-year period. To date a total of R24.8-million has been disbursed. What are the specific ways in which you assist your clients? The Masisizane Fund measures its impact in three ways – development impact, financial growth and the sustainability of businesses assisted. As such, the assistance we provide is through financial as well as non-financial support. The non-financial, value-adding services include: • Capacity development (business management and technical support). • Financial education. • Market development. • Product and service quality standards and compliance. Financial support comprises loan financing (provided by the Masisizane Fund) and grants provided through strategic partners such as the Old Mutual Foundation and others. What sort of trends are you seeing in terms of SMME businesses? In general there has been a rise in the number of small businesses, but what is important is for those SMMEs to remain in business. We are seeing a far greater focus being given to small businesses in particular by government; one example is the establishment of the Department of Small Business Development. When SMMEs are supported in terms of resources, skills and markets it creates a real opportunity for them to assist in creating much-needed jobs in South Africa. The private sector and government naturally have a significant role to play in advancing SMME development. Be that as it may, it has been a tough economic climate for most SMMEs and emerging businesses. This is more so the case in the agriculture sector due to drought, rising inputs, etc. What makes a successful SMME? Although there is no one-size-fits-all when it comes to success, there is a general success trait that most entrepreneurs show. These usually are people who are hands-on in their business and know how their business operates (or should operate), who have a thorough understanding of the strengths and weaknesses within their business. This is very important as it should feed into the approach an entrepreneur will take in trying to grow their business while still ensuring that it is sustainable. When entrepreneurs are financially disciplined they are more likely to succeed. CONTACT INFO Physical address: 21st Floor, Old Mutual Centre, 303 West Street, Durban Tel: +27 31 302 5415 Web: www.masisizane.co.za 49 KWAZULU-NATAL BUSINESS 2016/17