Cape Town – The Ministry of Small Business Development on Monday said it was overhauling its approach to funding to help entrepreneurs gain better access to financing and markets.
Small Business Development Minister Lindiwe Zulu told media ahead of her budget speech on Wednesday that a lack of access to finance and markets was identified “as one of the major obstacles to the development and growth of small businesses and cooperatives”.
“We are overhauling our approach to funding to ensure that it is in line with the principles and tenets of a developmental stage,” she said.
“The migration of Sefa [Small Enterprise Finance Agency] to the department gives us an opportunity to respond to the specific needs of small businesses and co-operatives in a coordinated way.”
Unlocking business opportunities
Government has set aside 30% of appropriate categories of state procurement for purchasing from SMMEs, cooperatives, township and rural enterprises.
“We are vigorously engaging to ensure that in due course, National Treasury issues the Practice Notes to implement the set-asides programme,” she said.
An issue has been government’s delayed payment to small businesses, which often causes financial ruin. “We will pay focused attention on the 30 days’ payment issue and ensure we monitor compliance,” said Zulu.
“Paying small businesses and co-operatives on time is critical to the sustainability of their businesses.
“We are working in collaboration with the Department of Planning, Monitoring and Evaluation as well as National Treasury.
Saving battling businesses
“We will develop a business rescue strategy aimed at supporting SMMEs and cooperatives in financial distress,” she said. “We will also announce tailor-made funding instruments for enterprises owned by women and youth.”
The ministry said it would put resources into township and rural economies to help informal businesses become sustainable and graduate to the next level.
It would also fast-track the implementation of the national informal business upliftment strategy to drive government’s support to township and rural enterprises.
“We will work with local government on the review of by-laws affecting SMMEs and cooperatives,” it said.
“We will intensify our Red Tape Reduction Programme. Among other things, we will work with local government on the review of by-laws affecting SMMEs and Co-operatives.”Follow @lecordeur Follow @fin24