PRESENTATION FOR DSBD PROGRAMMES

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1 PRESENTATION FOR DSBD PROGRAMMES

2 CONTET OF PRESENTATION Mission and vision of DSBD Why SMME s DSBD Incentive Offerings: 1. Informal and Micro Enterprise Development Program - IMEDP 2. Cooperative Incentive Scheme - CIS 3. Black Business Supplier Development Program BBSDDP 4. Share Economic Infrastructure Facility SEIF 5. Enterprise Incubation Programme- EIP

3 VISION AND MISSION OF DSBD VISION: A radically transformed economy through effective development and increased participation of SMME s and Co-operatives in the mainstream economy. MISSION: To create a conducive environment for the development and growth of small businesses and co-operatives through the provision of enhanced financial and non-financial support services and leveraging on public and private partnerships

4 Why SMMEs should be a pillar of the Economy: Comparative Analysis COUNTRY REPRESENTATION EMPLOYMENT ECONOMIC VALUE UNITED KINGDOM 99% of businesses 60% of employees Gross Value add: 49.8% Economy AUSTRALIA 96% of businesses 63% of all workers employed 93.5 % Micro enterprises 33% contribution to GDP GERMANY 99% of businesses 68.9% of employees 52% of Economic output TAIWAN 1,3 mil 97.6 % of businesses 78.3% of employed persons LATIN AMERICA 99% of businesses 67% of all employees PEOPLE S REPUBLIC OF CHINA 99% of businesses 84% of the workforce SOUTH AFRICA 96% of businesses 47 % of the workforce 31.5% Of Total Sales 30% of Total Exports 74% of sales 42% contribution to GDP

5 1. IFORMAL AND MICRO ENTERPRISE DEVELOPMENT PROGRAMME IMEDP PROGRAM OBJECTIVE to provide developmental support to informal and micro businesses that are operating under depressed areas and owned by historically disadvantaged individuals aims to develop and strengthen their capacity to be sustainable through the provision of access to information, business development support services (including skills and mentorship), business infrastructure and working Capital; to facilitate the formalisation of Informal enterprises as means of entering the economic mainstream

6 INFORMAL AND MICRO ENTERPRISE DEVELOPMENT PROGRAMME IMEDP cont. IMEDP OFFERING Eligible Informal Enterprises can receive an incentive grant value up to R Qualifying Interventions Includes tools, machinery equipment and; business development and training interventions,working capital etc QUALIFYING CRITERIA 100% black-owned Informal business. Turnover of between R to R per annum Operating or trading for more than one year.

7 2. Rationale CO-PERATIVES for Co-operatives INCENTIVES SCHEME Development CIS Unit PROGRAM OBJECTIVE To improve the viability and competitiveness of a co-operatives by lowering the cost of doing business. To assist the co-operatives to acquire their start up requirement. To build an Initial asset base for emerging co-operatives to enable them to leverage other support. ELIGIBLE CRITERIA Incorporated and registered in South Africa in terms of the Cooperatives Act of 1999.

8 CO-PERATIVES INCENTIVES SCHEME CIS cont. Emerging co-operatives with a majority black ownership Have projects in any of the different economic sectors. Adhere to co-operative principles (have at least five members: Be owned by a historically disadvantaged individual (HDI). Be rural or semi-urban based. Promote the involvement of women, youth and people with disabilities. PROGRAM OFFERING: Qualifying enterprises are eligible to receive a maximum of up to R which is 100% grant. Minimum Grant that can be applied for is R

9 CO-OPERATIVE INCENTIVE SCHEME - CIS ELIGIBLE PROJECTS Business Development Services Feasibility Studies /Market Research Production Efficiency Technological Improvement Projects Plant and Machinery: 60% Start-up requirement (discretion of AC) Working Capital (Opening stock-start ups): 40%

10 3. Black Business Suppliers Development Programme - BBSDP BBSDP OBJECTIVE To fast-track existing SMMEs that exhibit good potential for growth into the mainstream economy. To grow black-owned enterprises by fostering linkages between black SMMEs, corporate and public sector enterprises. To complement current affirmative procurement and outsourcing initiatives of corporate and public enterprises. To enhance the capacity of grant recipient enterprises to successfully compete for corporate and public sector tenders and outsourcing opportunities

11 Black Business Suppliers Development Programme BBSDP cont. BBSDP OFFERING Eligible Enterprises can receive an incentive grant value up to R1 million The program provides grants to a maximum of R for tools, machinery and equipment and; R for business development and training interventions per eligible enterprise. For Tools, Machinery and Equipment, the BBSDP will offer a costsharing grant of 50%,and approved enterprises will contribute 50% of the necessary costs (for business development services and training). For Enterprise Support Services interventions, the BBSDP will offer a cost-sharing grant of 80% of the approved costs of qualifying interventions, and approved enterprises will contribute 20% of the necessary costs (for business development services and training).

12 Black Business Suppliers Development Programme BBSDP cont. QUALIFYING CRITERIA Predominantly black-owned (51%). Have a predominantly black management team (50%). R to R35million annual turnover. Operating or trading for at least one year. If operating for less than a year but has a valid tender or contract are considered

13 4. SHARED ECONOMIC INFRASTRUCTURE FACILITY - SEIF PROGRAM OBJECTIVES Aimed at supporting enterprises by stimulating and encouraging Public and or Private sector investment through efforts of lowering infrastructure costs. To leverage public sector investment or private sectors that would provide necessary infrastructure by: creating an enabling environment for businesses to crowd-in investment mostly in townships, Rural areas and the inner city where business activity is taking place

14 SHARED ECONOMIC IFRASTRUCTURE FACILITY SEIF cont. PROGRAM OFFERING SEIF Is a 50:50 cost-sharing grant made available on a reimbursable basis, where the dsbd makes contribution of 50% towards the qualifying infrastructure project upon the completion of agreed milestones. The programme is capped at a maximum grant of R5 million (VAT inclusive) per qualifying applicant.

15 5. ENTERPRISE INCUBATION PROGRAMME- EIP. PROGRAM OBJECTIVES The objective of the programme is to support the establishment of new incubators and for the growth and expansion of existing incubators. Both new and expanding incubator applicants will be evaluated in line with the sector/field related experience of the applicant accompanied by confirmed past performance and portfolio of evidence. EIP is targeted at South African registered and tax compliant entities - Small, Medium an Micro Enterprises (SMMEs) and Cooperatives with vast experience in the development and mentoring of early stage enterprises and cooperatives with potential to supply goods and services to firms in the local economy on a sustainable basis.

16 ENTERPRISE INCUBATION PROGRAMME- EIP cont. PROGRAM OFFERINGS For the pilot year, the programme offers a hundred percent (100%) subsidy from a minimum of five million rand (R ) to a maximum of 10 million rand (R ) to eligible applicants up to 3 years depending on the sector, activities and development needs of incubated enterprises and subject to the availability of funds. The incentive may be used to acquire qualifying business development support, infrastructure, machinery, equipment and tools

17 ENTERPRISE INCUBATION PROGRAMME- EIP ELIGIBLE ENTERPRISES To qualify for funding under the EIP an applicant must be: A registered legal entity in South Africa in terms of the Companies Act, 1973 (as amended) or the Companies Act, 2008 (as amended); the Close Corporations Act, 1984 (as amended) or the Co-operatives Act, 2005 (as amended),non-profit Organisation (NPO) and Trust. The programme is available to applicants that want to establish new incubators as a separate registered legal entity or wish to grow and expand existing ones.

18 CONCLUSION EXCLUSIONS: The following are not eligible for funding under of the incentives programmes: Office furniture costs; Land and buildings; Design and printing of marketing materials; Activities related to liquor, tobacco, and professionals (health and legal); Any other costs that the Adjudication Committee, at its sole discretion, can deem as non-qualifying.

19 CONCLUSION MAINSTREAMING: In all our programs it is expected hat we support: Women = 50% Youth = 30% People with Disabilities = 2% Rural = 30% Township = 50% BUDGET: PROGRAMME: IMEDP CIS BBSP SEIF EIP BUDGET R65M R75M R245M R30M R46M TARGET

20 Thank You Ms Goabi Moiloa

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