Strategy in SA. Development SMME. PDF Created with deskpdf PDF Writer - Trial ::

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1 SMME Development Strategy in SA PDF Created with deskpdf PDF Writer - Trial ::

2 Outline of presentation Background Lessons learnt for the past 10 years Rationale for the revised strategy Proposed strategic approach Monitoring and evaluation 2

3 Background Provisions of the White Paper 1995 Elements of the White Paper Creating an Enabling Legal Framework (NSBA, 1996) Streamlining Regulatory Conditions (Reg Review) Access to Information and Advice Access to Marketing and Procurement Access to Finance Physical Infrastructure Training in Entrepreneurship, Skills and Management Access to Appropriate Technology

4 Provisions of the White Paper (cont.) Institutional framework SBDA - Ntsika NSBC Financial Institutions /Khula National grid of service centres /LBSCs Provincial small business desks/ Provincial SME directorates Enabling legislation National Small Business Act, 1996

5 Lessons Towards the strategic shift Lack of sufficient capacity for implementing SMME support through retailers (wholesaling model) No readily available entrepreneurs to take up opportunities Generic approach to SMME needs and challenges Limited support of black entrepreneurs by commercial banks Poor alignment and co-ordination of government initiatives 5

6 Lessons (cont.) Towards the strategic shift Need for SMME support targeting to address spatial disparities Need for differentiation of small business categories into market segments and types of businesses Need for integrated and sectoral approach towards SMME support Need for a coherent voice for small businesses Need for Government intervention to address continued lack of access to finance (between R10k-R250k) 6

7 7 Rationale for revising the strategy Give effect to Improved contribution of small businesses to formal employment and economic growth Positive entrepreneurship culture Reduction of small enterprise failure rates Diversification and graduation of small businesses particularly Black over-concentrated in micro category Segmentation of the market and support requirements according to size and type of entrepreneur Adequate capacity amongst implementing agencies (from services whole sale approach to retail approach)

8 8 Rationale for revising the strategy (cont.) Give effect to Co-ordination of government funded small business support interventions Strengthening the Private-public and public-public Partnerships in response to small business challenges Improved institutional capacity for information and knowledge management, research, monitoring and evaluation Consolidating of existing state resources under a common strategic purpose Attraction of private sector involvement in highly developmental initiatives

9 9 Focus on The Strategic Thrust Create an enabling regulatory environment Substantially strengthen support for SMMEs access to finance Create an enabling regulatory environment Further expand market opportunities for specific categories of small enterprises Localise small-business support through a grid of co-ordinated information, advice and other Business Development Services access points Initiate a national entrepreneurship drive and expand education and training for small business Co-fund minimum business-infrastructure facilities in local-authority areas across the country

10 Objectives of revised strategy PDF Created with deskpdf PDF Writer - Trial :: Create an enabling environment for small enterprises Create sustainable jobs in the small business sector Ensure that blacks are equitably represented in the small business sector Increase the competitiveness of the small business sector Improve communication between government and the small business sector Increase small business contribution to GDP 10

11 Pillar 1 Promoting entrepreneurship Strengthen national awareness about the critical role of entrepreneurship Promote alternative focus on ownership Expand franchise opportunities Strengthen business associations and networks Strategic approach Pillar 2 Creating enabling environments Maintain small-businesssensitive business regulations Improve access to finance Strengthen access to markets via procurement, and business linkages Facilitate the availability of business infrastructure and capacities Localise support and expand services delivery network Pillar 2 Competitiveness Building Strengthen managerial, business and technical skills Facilitate improved quality, productivity and competitiveness Support technology transfer, incubation and the commercialisation of research products Expand SMME-focused sector-support strategies

12 12 Proposed strategic approach cont. Targeting of support Size of enterprise (micro, start-ups, informal) Gender Youth Sector Enterprises in the priority sectors -Agriculture and agro-processing -Construction -Small-scale manufacturing -Tourism -Crafts and cultural industries -Minerals beneficiation

13 Refinement of institutional arrangement PDF Created with deskpdf PDF Writer - Trial :: Prioritize localization of Support (seda) A nation-wide network of information-access points is to start unfolding, covering 80 local centres and 25 district centres in the initial phase, and reaching all 284 local authorities and 54 districts at the end of the first five years. At least eight regional (provincial) offices are to be established. Existing support instruments and programmes are to be redesigned. New products and services are to be developed and special projects identified.. Incorporation of Seda Technologies strengthening technical assistance technology transfer and incubation services

14 Refinement of institutional arrangement PDF Created with deskpdf PDF Writer - Trial :: Establishment of SAMAF for Apex Fund Provide finance to end-users that require up to R per loan Finance productive and income generating activities through a revolving Fund that will lend to Partner Organisations for on lending to micro entrepreneurs. Establish a network base in all the Provinces New Khula Strategy Provide financing primarily for new and expanding first-economy enterprises that require finance in the range from R to R1 million, specifically between R10k and R250k Consolidation, expended retail network and better branding of the state s involvement in SMME finance Increase focus on the provinces less effectively served with financing facilities (targeting about 60% of loans to regions other than Gauteng, KZN and the Western Cape ( Isibaya Fund) Work closer with a selected number of private and parastatal institutions, utilising their infrastructure and capabilities

15 15 Monitoring and evaluation Annual review Annual summit Small business advisory council Boards Cotti PDF Created with deskpdf PDF Writer - Trial ::

16 16 The end Thank you PDF Created with deskpdf PDF Writer - Trial ::