R1 billion to be allocated to new SME Fund

02 November 2017

Deputy President Cyril Ramaphosa says R1 billion will be allocated to the newly announced fund for Small and Medium Enterprises (SMEs) as government pushes to empower small businesses, especially those in the townships.

“As was announced in the [Medium Term Budget Policy Statement] by the Minister of Finance last week, a new fund for small business and innovation will be established which will be allocated R1 billion in 2019/20.

“The National Informal Business Upliftment Strategy is also available to help township enterprises upgrade their business activities,” he said.

The Deputy President said that government provides financial support to youth-owned businesses through the Small Enterprise Finance Agency (SEFA), the National Empowerment Fund and the Industrial Development Corporation (IDC).

He said over the past financial year, the IDC approved R2.3 billion funding to youth empowered businesses, which are those with more than 25% youth equity ownership.

“Last year, SEFA reported that it approved funding of R222 million to over 10 000 youth-owned businesses showing that the focus is on helping to empower youth-owned businesses.

“Much is being done to empower the youth and also to develop township enterprises but there is still much that needs to be done and what also needs to be done is to improve the business skills, the entrepreneurial knowledge of young people in the townships, in the rural areas and we are embarking on a number of other initiatives of setting up incubation centres that are going to help young people to become more proficient,” he said.

He said township entrepreneurs have not yet really found opportunities that can truly empower them.

To this end, government is determined to reverse this, the Deputy President said.  “We are already implementing key elements of a strategy to boost township enterprises. Many small businesses in our townships have already received loans and industrial funding to enable them to enter new markets and expand their operations,” he said.

The Deputy President said last year, disbursements from SEFA totalled around R1 billion and this was targeted towards township businesses as well as rural businesses.

The Deputy President also said: “The actions against cartels and monopolies are further means and ways of opening space for township enterprises.”

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