South African Business 2021

OVERVIEW Development

OVERVIEW Development finance and SMME support A new fund aims to make R5-billion available at a fair price. Anew fund for SMMEs was launched in 2020 with the aim of providing capital at a fair price. Former SA Post Office CEO Mark Barnes, who previously worked in investment banking and private equity, is heading the Kisby Investment Fund. Partners in the fund are Arena Holdings (media), 4AX Africa Exchange, 4AX Debt Services and Rainfin (online credit). Barnes told Business Day that the fund would be compensated for the risk in supporting companies that have to “hunt around in the overpriced debt market” by taking equity in the firm. Kisby is aiming for a R5-billion fund to support companies in the R10-million to R1-billion revenue bracket. Funding is available for technology start-ups in many forms but getting funding early in the process can be difficult because the concept is not proven. For asset management company Futuregrowth, ring-fencing some funding for allocation to early-stage development is a way of ensuring that potential is not overlooked. The company has put 10% of its development equity fund (or R280-million) into businesses such as payment devices (Yoco), infrastructure platform (Rubicon), fintech (LifeCheq) and an app for domestic workers (SweepSouth). Data company 5M2T (5Minutes2Town) 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 an “in-market audit”. This allows for better ordering and planning for suppliers and logistics operators. The Covid-19 lockdown had a severe impact on many small businesses. A survey conducted by risk finance company Business Partners Limited found that 95% of SMME respondents thought they would not survive without help. The company’s packages in response included a Repayment Relief Programme and a Financial Assistance Programme capitalised at R100-million. Most big companies in South Africa have two main programmes to support SMMES: enterprise development (ED) and SECTOR INSIGHT Futuregrowth has a focus on early stage start-ups. local supplier development (or procurement). Venetia Mine in northern Limpopo, a De Beers Group mine, has more than 50 SMMEs enrolled in incubation programmes and 34 locallyowned companies are doing business with the mine. The National Department of Small Business Development (DSBD) has several programmes to assist SMMEs and cooperatives. The Small Enterprise Development Agency (Seda), a subsidiary of the DSDB, has 42 incubation centres in South Africa under its Seda Technology Programme (STP). The National Department of Trade, Industry and Competition (the dtic) is trying to stimulate township and rural economies. Programmes include the Enterprise Investment Programme (EIP). The South African SME Finance Association (SASFA) is a national, self-regulating body for alternative finance companies. ■ ONLINE RESOURCES National Department of Small Business Development: www.dsbd.gov.za National Small Business Chamber: www.nsbc.org.za Small Enterprise Development Agency: www.seda.co.za South African SME Finance Association: www.sasfa.net SOUTH AFRICAN BUSINESS 2021 86

FOCUS Coega Development Corporation a.co.zaPromoting small business as a way of sparking economic growth, creating jobs and tackling inequality. , Arcadia, In championing socio-economic development, the Coega Development Corporation (CDC) places the interests of small businesses at the centre of economic growth. Small business development and support is crucial as a catalyst for addressing poverty, unemployment and inequalities in the society. The National Development Plan 2030 encourages Small, Medium and Micro Enterprise (SMME) support through procurement and developing BBBEE LEVEL 2 CONTRIBUTOR ISO 9001:2015 ISO 14001:2015 ISO 45001:2018 The CDC has a ISO dedicated 20000-1:2011 SMME ISO Business 27001:2013 Unit that prioritises empowerment to unlock opportunities particularly www.coega.co.za in the built environment such as infrastructure development and facilities maintenance. “The billions of rands to be spent on infrastructure development in the country to revive our economy should also benefit SMMEs,” says Dr Ayanda Vilakazi, CDC’s Head of Marketing, Brand and Communications. SMME participation on large contracts is black and female managers and professionals. Between 2015 and 2020, SMME-procurement spend achieved by the CDC was 29%. In 2019, R461.77-million benefited small businesses in all areas where the organisation has operations. Contact details Head Office: Coega SEZ Business Centre, Corner Alcyon Road and Zibuko Street, Zone 1, Coega SEZ, Port Elizabeth 6100 Tel: (RSA only): 08610 COEGA | 08610 26342 Tel: +27 41 403 0400 | Fax: +27 41 403 0401 Email: info@coega.co.za Website: www.coega.co.za Coega has offices in Pretoria, East London, Cape Town and Durban. increasing, a sign of the success of the CDC’s SMME development programme. Some highlights: • SMME involvement in the construction of the fourstar Bluewater Bay Sunrise Hotel, Port Elizabeth. • As of March 2020, 383 SMMEs benefited from training, 178 CETA accredited. • In 2019/20 CDC, SARS and CIDB held compliance workshops for 652 SMMEs. • 72 SMMEs successfully upgraded on CIDB through CDC intervention and support. A key organisational objective of the CDC is to facilitate, promote and drive the inclusion of SMMEs in procurement opportunities. The CDC is also working at improving its B-BBEE status. The organisation improved its B-BBEE status from level 4 in 2019 to level 2 in 2020. ■ 87 SOUTH AFRICAN BUSINESS 2021