FOREWORD
WHY ENTREPRENEURSHIP GROWTH SHOULD BE BOOSTED Thakhani Makhuvha, CEO of Small Enterprise Finance Agency (sefa) says entrepreneurship has been identified as key in addressing unemployment and poverty worldwide because entrepreneurs make significant impact by transforming what others perceive as insurmountable problems into potential possibilities.
B
usiness activity driven by Small, Medium and Micro Enterprises (SMMEs) and Cooperatives is widely regarded as the fuel necessary to fire up economic growth, and South Africa (SA) must push for urgent and significant growth to ensure that economic and social ills are steered off. We are mandated at sefa to provide access to funding by SMMEs and Cooperatives especially from under-resourced communities such as townships that can generate scalable and sustainable employment opportunities. However, we remain challenged with finding the right partners who can access these under-resourced communities on a bigger scale. Entrepreneurs from these areas experience high failure rates primarily due to poor preparation, lack of skills and mentoring. We would like to see more instances where small businesses, among the economically inactive including youth, are boosted in order to reduce unemployment, poverty, escalating crime levels and drug abuse. Small businesses also facilitate specialist inputs into big industry value chains. They ensure that the bigger players use their muscle to drive economic growth, whilst the coordinated activity of small and big businesses is allowed to yield the desired transformation of the country’s economy. SMME and Cooperative development is advancing, albeit slowly, and the government has established mechanisms to promote the desired small business growth and social cohesion,” Makhuvha says. This drive led to the establishment of the Department of Small Business Development (DSBD) in 2014, with sefa, as one of its agencies. The joint venture between sefa and Awethu Project, (sefa Awethu Youth Fund) has been 8 www.incub8mag.co.za · Volume 1 · 2017
instrumental in offering financial support to young entrepreneurs. As a result, we have approved R64 million funding for the Awethu entrepreneurs, with R60 million for on-lending and R4 million as a grant for business support purposes. Entrepreneurs benefiting from this project have dedicated incubator coaches who ensure that post training, entrepreneurs qualify for funding. Since April 2013, sefa Awethu Youth Fund has disbursed over R43 million to approximately 58 SMMEs, with 95% of the disbursed amount benefitting black entrepreneurs and close to 70% being youth-owned enterprises. This financial support has helped create and sustain at least 236 jobs to date. SA government is confident about the potential that SMMEs have on job creation. Hence, the highlight in the National Development Plan that 90% of the new jobs should be generated by the small business segment by 2030. The Nine Point Plan unlocks the potential of SMMEs and Cooperatives, including township and rural enterprises. The 30% set-aside policy allows small businesses to participate in the government’s procurement spend. This is an area where we play a critical role. Creating a safe and protected environment for SMMEs and Cooperatives to succeed requires focused interventions by the private sector, government and business chambers. These interventions include incubation that offers skills, mentoring and capacity to budding entrepreneurs on a bigger scale. Incentives geared at driving success should be included in these programmes to ensure positive outcomes.
Makhuvha highlights that since April 2013, sefa Awethu Youth Fund has disbursed over R43 million to approximately 58 SMMEs, with 95% of the disbursed amount benefitting black entrepreneurs and close to 70% being youth-owned enterprises.
