Max Lichaba was able to more than quadruple his jewellery business’s sales, increase his staff complement from 20 to 73 employees and break into international markets, after he got help from the Small Enterprise Development Agency (Seda).
The entrepreneur, who runs Lichaba Creations, was also able to get a R600 000 machinery grant and to implement quality management systems through the Seda Technology Programme.
He was just one of tens of thousands of entrepreneurs that received assistance in the form of funding or business support from the national government in the 2013/14 financial year.
National government funding agencies in 2013/14 advanced over R2.3 billion to 47 000 small and micro businesses.
This is up by over 50% on the 30 500 entrepreneurs who received R2.3 billion in 2012/13, mainly with an increase in micro enterprises benefiting from funding from the Small Enterprise Finance Agency (Sefa). A further 58 000 entrepreneurs and youth (up from 53 000) were assisted with business support.
Millions more were disbursed to small businesses if one includes the Department of Trade and Industry’s cost-sharing grants through its various incentive schemes or funding by provincial development agencies.
Funding statistics reveal that the bulk of finance was advanced by Sefa which disbursed R822 million to 46 407 small and micro businesses and the Industrial Development Corporation (IDC), which disbursed R1.03 billion to 100 entrepreneurs.
- R254.7 million was disbursed to 44 beneficiaries through the National Empowerment Fund’s (NEF) iMbewu fund.
- R26 million went to 70 seed-funding projects by the Technology Innovation Agency (TIA).
- R10.5 million in grants was given to 43 390 young people by the National Youth Development Agency, as well as helping to establish 765 enterprises.
- R75.4 million was disbursed by the Support Programme for Industrial Innovation, with 77% of allocations going to enterprises with an annual turnover of less than R10 million, while R147.7 million was disbursed through the Technology and Human Resources for Industry Programme (Thrip). In all 205 small businesses benefited.
The amount lent out to small businesses by the government is less than a quarter of that advanced by banks during the same period (R11.1 billion from SME retail alone), according to Reserve Bank statistics.
This number is likely much bigger, once one adds those small businesses that obtained bank credit classified by the Reserve Bank under SME corporate lending (which includes some large firms too).
Most of those assisted with business support were helped by Seda, which worked with 10 619 businesses.
About 67% of those assisted increased their sales, while 40% increased their staff complement. This is up over 2012/13 when these figures were 63% and 35% respectively.
- 2 484 entrepreneurs were assisted by the Seda Technology Programme, of which 1 587 were incubated by Seda’s 43 incubators (including 423 new firms created). Those incubated created 2 900 jobs (about two per beneficiary), but just 1 824 of these were permanent jobs. The combined annual turnover of those incubated was R800 million, which is an average of about R504 000 per beneficiary.
- 1 904 entrepreneurs were helped by TIA’s technology stations.
- Over 500 small businesses were assisted with productivity improvement measures by the Workplace Challenge programme.
- NEF: 48 businesses, including large companies with black partners were assisted with mentorship to the value of R3.1 million
As outlined in its latest annual report by its acting chief executive Sipho Zikode, Seda is now focusing more on established small businesses (those employing between 21 and 200 people) to increase its job creation impact.
The percentage of clients in this part of the small enterprise sector has increased from 1.3% to 2.4%.
- For more information, go to www.thedti.gov.za
Small firms strike gold