Remember, at election times, choose, support and vote for the party to best influence the country’s economy and business environment.
SMALL-scale enterprises could now enjoy better access to financial services and low financing costs following the signing of a co-operation agreement between state-owned developmental funding agency Khula Enterprise Finance and the Banking Association of SA (Basa).
Small businesses in the country are regarded as the main contributors to job creation, something that SA — with an unemployment rate of 25% by some measures — is working hard to encourage.
Khula and Basa said they would endeavour to facilitate the formation of a credit bureau for small and medium enterprises, the first of its kind in Africa, and would provide access to an information portal for small businesses.
They would also conduct research, facilitate skills transfer, assist in the development of a national mentorship programme and promote financial literacy.
In April, Economic Development Minister Ebrahim Patel told Parliament Khula was to become a wholly owned subsidiary of the Industrial Development Corporation (IDC) with a budget of R2,8bn this year. It would incorporate the South African Micro Finance Apex Fund as well as the IDC’s small business loan book.
Khula is SA’s main small business financing vehicle but has been hampered by underfunding and, until recently, its restriction to wholesale financing. Its agreement with Basa comes at a time when banks are often seen as doing too little to finance small business development.
Basa MD Cas Coovadia, however, said statistics showed that the sector provided 95% of funding for small businesses. The proposed credit bureau could change how the banks look at risk in the market, he said.
“The (small business) credit bureau initiative will assist banks to access reliable information on the day-to-day transactions of the business and not just the individual.”
The role and mandate of the publicly funded Khula should be to develop markets, allowing the private sector to come in with funding, Mr Coovadia said.
He said there was a need to develop more risk-appropriate evaluation models and products tailored to small business development.
“Here we are talking about a very focused, on-the-ground, issues-based collaboration. The first thing we need to do is to sit down and have an assessment of what we have been doing independently and agree on what we see as each other’s role,” Mr Coovadia said.
SA’s unemployment rate climbed to 25,7% in the second quarter — its highest in seven years — as an influx of job seekers into the labour market surpassed job creation.
Analysts were shocked at the news from Statistics SA yesterday, which showed the jobless rate leaping sharply from 25% in the first quarter.
Overall, the number of employed people rose by 7000 in the second quarter — a far cry from the number needed to reach the government’s goal of creating 5-million new jobs by 2020.
“We are still in a labour recession,” T-Sec economist Mike Schussler said yesterday. “The economy might be growing but it’s not creating jobs.”
I’ve just read a piece about the new EDF (Enterprise Development Fund) that will be rolled out under the NEF’s control.
The thing is, yet again, the BEE drum is the one that’s beating the loudest. Essentially, black-owned and managed businesses will be the only ones eligible for this funding.
The way I see it, you can have one or the other. Either you’re committed to job creation, OR you are committed to BEE.
In case you’re wondering why, let me explain.
If job creation is a priority, then any business with a viable plan, that has the potential to create jobs, for anyone in the country, should be a priority. It doesn’t matter, as far as I know, what race the person who is doing the hiring is – it’s the job, and the salary, that matters.
On the other hand, if it’s BEE that is a priority, then government is essentially saying that they don’t care if anyone else can create jobs, because it’s not the jobs themselves that are important, but getting the right colour bums in the managing seats.
Given our huge unemployment problem, it seems like folly to be restricting any enterprise, with the potential of creating jobs, from accessing the assistance they need to do so. I might be wrong, but if a white person can create 10 or 20 jobs, for example, with their business idea, are the jobs not more important than the colour of the entrepreneur?
Our government needs to give us all a straight answer on the BEE / job creation dilemma. Are they more interesting in maintaining the tenderpreneur mentality, or are they interested in real economic reform.
If it’s the former, then it’s business as usual I suppose. However, if it’s the latter, then the policies surrounding small business development definitely need an urgent rethink.
We are an emerging economy. We are a nation crippled by unemployment.
Maybe it’s time that those became the driving factors in policy with regards to business development, rather than the current one, which seems to be: if you’re not black, we don’t want your jobs.
It’s not rocket science, but it is about unglamorous (no overseas shopping trips) hard work, listening to your customers instead of assuming things on their behalf, and understanding the business environment, preferably not as a failed tenderpreneur yourself.
Anglo American (AGL), one of the world’s five largest resources groups, on Thursday said it was committed to creating and sustaining 25,000 jobs by 2015. This it would do through up to 1,500 new businesses.
Speaking at Anglo American’s local procurement and enterprise development trade fair, Chief Executive Cynthia Carroll said Anglo’s enterprise development arm, Zimele, has already invested some 467 million rand in 845 local businesses, which together employ about 16,000 people, and generate a turnover of more than 1.8 billion rand.
She also said Anglo’s commitment to developing new businesses supported the country’s vision of creating economic opportunities for black South Africans.
Anglo’s procurement spend with black empowered business in the past 10 years has increased from 911 million rand to 21 billion rand.
This makes up more than 40% of the group’s total available procurement spend to historically disadvantaged South Africans.
Department of Mineral Resources deputy minister Godfrey Oliphant said a recent study showed that South Africa’s youth would rather be entrepreneurs than be employed.
“It could be argued that lack of employment has encouraged the youth to look for alternative means to support themselves,” Oliphant said.
He said over 70% of the youth, particularly the black youth, consider running their own businesses, but they recognised that they needed experience.
He encouraged big business to get youth more involved in entrepreneurship. – I-Net Bridge