Budget: Bonus for Khula

2011-02-23 12:30

Khula Enterprise chairperson Malose Kekana’s dream to have the

state-owned financier lending directly to small businesses received a major

boost when Finance Minister Pravin Gordhan announced in his budget speech that

Khula will be allocated R55 million to pilot the project.

Khula has been providing a credit guarantee scheme product to small

businesses, which required them to apply for loans from banks and the

state-owned financier would repay the loan if the small businesses failed to

meet their repayment obligation.

Khula, which President Jacob Zuma announced in his State of the

Nation Address could be merged with the Micro-finance Apex Fund and Industrial

Development Corporation’s (IDC) small business finance division, was not the

only state entity that dealt with companies to benefit.

The Apex Fund will receive an additional R282 million while R250 million will go towards the IDC to support agro-processing businesses.

R600 million will be channelled towards enterprise investment

incentives.

“Small businesses are an important source of jobs. Businesses that

employ fewer than 50 workers account for 68% of private sector employment,” said

Gordhan.

Economic regulatory agencies, like the Competition Commission, also

benefited by receiving R735 million, while R120 million was earmarked for the

national tooling initiative.

“Under the guidance of Trade and Industry Minister Rob Davies, R10 billion will be spent on industrial policy action plan investment promotion of

the medium term expenditure framework period,” said Gordhan.

“This will include the automotive production and development

programme, clothing and textiles production incentives, the film and television

production incentive and support for small manufacturing and tourism

enterprises.”

Gordhan also announced some tax relief for small enterprises.

“From March 2012, micro businesses that register for value added

tax will no longer be barred from registering for turnover tax,” he said.

He added that R2.2 billion will be allocated to land reform and

agricultural development programmes that are focused on job creation and poverty

reduction.

A further R400 million will be channelled towards the comprehensive

agricultural support programme and the land care programme grant and funding to

enable an additional recruitment of 5 000 people into the National Rural Youth

Services corps.

“A total of R19 billion will be spent on rural development and

agriculture in 2011/12, rising to R21 billion in 2013/14,” he said.


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