Mpumalanga Business 2017-18 edition

OVERVIEW Development

OVERVIEW Development finance and SMME support A dedicated SME fund will have R500-million capitalisation. SECTOR INSIGHT MEGA supports small businesses in many ways. • The National Gazelles is a national SME accelerator. A major plank in the economic planning of the Provincial Government of Mpumalanga is the revitalisation of township and rural economies. The 2016/17 financial year saw R80-million allocated to this progamme to give financial and technical support to small and medium enterprises. The Mpumalanga Economic Growth Agency (MEGA) is the implementing agent. An agreement has been signed by Standard Bank and MEGA tolaunch an SME Fund with a capitalisation of R500-million. In addition to a general commitment from the provincial government to purchase from SMMEs, township enterprises or co-operatives where possible. Rural enterprises feature strongly in the loan book profile, and there is significant support for women and youth-owned businesses. MEGA has also overseen the rehabilitation of industrial premises in former homelands and formed partnerships with financial institutions for funding. A Social Enterprise Model is being introduced to try to link small enterprises with infrastructure projects. Planners want to see local businesses building the roads and public buildings in the areas where those facilities are sited. MEGA has been allocated R10-million to assist SMMEs and co-operatives to make the most of opportunities that this model will create. Examples of township businesses supported by the Department of Economic Development and Tourism (DEDT) are: • tyres: an agreement with Sumitomo Rubber SA (Dunlop) to promote local tyre enterprises • sanitary towel plant: financial support for the commissioning of a sanitary towel plant by the Ntirhisano Sanitary Worker Co-operative in Bushbuckridge (and support for business development and access to market) Partnerships with private companies are also in place: • the power plant being built at Kusile has benefited local communities, in particular companies owned by women and young people (55%) • 82 businesses from Mpumalanga have gradu- MPUMALANGA BUSINESS 2017/18 56

OVERVIEW ated from Eskom’s Contractor Academy • Eskom will invest a further R30- million to support cooperatives • South African Breweries’ national Kick Start Programme now has a regional component. Participants in the Mpumalanga Youth Entrepreneurship Programme can qualify for the Kick Start programme • Sasol and Eskom are working with the provincial government on a fly-ash beneficiation scheme that will give business opportunities to SMEs. Private companies are also trying to support SMEs 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. Using the supply chain to benefit small business is at the heart of Anglo American’s Zimele, which runs four enterprise development and investment funds. The initiative experienced a growth spurt when a system of hubs was established, with managers assigned to each hub. National support The National Department of Small Business Development (DSBD) has several programmes to assist SMEs and co-operatives. These include: • The Black Business Supplier Development Programme, a cost-sharing 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 is one of the most active agencies in supporting entrepreneurs. Seda is not a financial agency, focussing rather on training and administrative support, although the agency will help SMEs get in touch with financial bodies. There are five branch offices of Seda in Mpumalanga and a further four sites that are part of the Seda Technology Programme (STP): • Mpumalanga AgriSkills Development and Training, Nelspruit • Sugar Cane Incubator, Malelane • Mpumalanga Stainless Initiative, Middelburg • Timbali, Nelspruit. This initiative coordinates the growing programmes of small farmers and helps to get products to market. The National Gazelles is a national SME accelerator jointly funded by Seda and the DSBD. The aim is to identify and support SMEs with growth potential across priority sectors aligned with the National Development Plan and Seda’s SME strategy. Businesses can receive up to R1-million for training, productivity advice, business skills development and the purchase of equipment. The Industrial Development Corporation (IDC) is a strong supporter of SMMEs either by disbursing loans or by taking minority shares in enterprises and giving advice. The Development Bank of Southern Africa (DBSA) is another major funder of public projects. The major banks all have SMME offerings. Standard Bank runs a Community Investment Fund and Nedbank offers an enterprise development product for businesses with turnovers up to R35-million. Agribusiness and agri-processing are among the three sectors that are targeted by the Masisizane Fund for loan financing. The others are franchising/commercial and supply chain/manufacturing. Over and above loans that are available, training is offered through a Business Accelerator Programme. ONLINE RESOURCES Development Bank of Southern Africa: www.dbsa.org Gazelles: www.nationalgazelles.org.za Industrial Development Corporation: www.idc.co.za Mpumalanga Economic Growth Agency: www.mega.gov.za National Department of Small Business Development: www.dsbd.gov.za Shanduka Black Umbrellas: www.shandukablackumbrellas.org Small Enterprise Development Agency: www.seda.org.za Small Enterprise Finance Agency: www.sefa.co.za 57 MPUMALANGA BUSINESS 2017/18