The Department of Trade and Industry (DTI) is planning a new small business grant programme aimed at township businesses to improve their production and become better suppliers to formal businesses.
Speaking at the National SMME Summit in White River, Mpumalanga, the Director-General of the DTI, Lionel October, said the new grants will range between R5 000 and R50 000 and are designed to enable the purchase of equipment and basic business necessities without which businesses find it difficult to function and produce goods.
“We have not done enough for small businesses and especially rural and township businesses. We need a new delivery model for these new grants,” he said.
“We are planning a R1.2 billion package of support measures, primarily aimed at assisting small township businesses and co-operatives to upscale and be more capable of becoming real suppliers to bigger business.”
He said the DTI was planning to partner with municipalities on a 50:50 cost-sharing basis to ensure a more accessible way for small businesses to get these grants.
“In other countries, when big businesses grow, the small businesses follow and also grow through a symbiotic relationship. This hasn’t happened enough in South Africa for structural reasons. We have done a lot to build industrial capacity in sectors like the automotive sector, now we need to help build the capacity of small businesses,” he said.
October also disclosed that the DTI had approved funding for a further 27 incubators to start or expand.
Government was on track with its plan to have 250 small business incubators in the next five years, to provide entrepreneurs with a supportive environment to ensure sustainability. Support for co-operatives in the agriculture and agri-processing sector would also be increased.
October says the DTI had created many structures to support small businesses – “but we haven’t yet really cracked the problem. The problem is not in starting businesses.
What we need is improved market access. We must get more small business owners into supply chains of the private sector, as this makes up 70% of the economy – government only accounts for 30%.”
More than 600 delegates attended the summit, including small business owners development practitioners, municipal and provincial officials, corporate representatives and NGOs.