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New small business agency Sefa gets R780m boost

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Article from BuaNews - 24 April 2012 - www.buanews.gov.za

 

Small businesses will get a capital injection of over R780m, with the signing of an agreement between the China Development Bank and the Industrial Development Corporation (IDC) and the Minister of Economic Development Ebrahim Patel.


The agreement, signed by Patel on Tuesday at a green economy expo shortly before he was expected to deliver his Budget Vote, was one of several which will boost support and funding to small businesses.

Under the first agreement, the China Development Bank will commit $100m in funding for small businesses which will be disbursed through the IDC's Small Enterprise Finance Agency (Sefa) which was launched yesterday.

The $100m loan will be repayable over 10 years, Patel said during the signing of the agreement in Parliament.

He said the agreement was the first "concrete partnership" flowing from the Beijing declaration signed between South Africa and China in 2010 that outlined several key areas for co-operation between the two countries.

Jiang Wei, the economic and commercial counsellor from the Chinese embassy, said small and medium-sized enterprises were important to society and added that China was happy to co-operate with the Department of Economic Development.

In a further boost to small businesses, accountants will be made available to small firms, following the signing of an agreement between the South African Institute of Chartered Accountants (Saica), the department and Sefa to train 100 accountants.

Some of the accountants will be placed in small businesses and black-owned enterprises, while the remainder will be retained in a hub which would then be utilised by small firms.

A third agreement was signed between the Economic development department and Wits University to train 200 economic officials in local government in offering economic support - initially in five municipalities - after a similar programme was run with provinces.

Patel also witnessed the signing of IDC agreements on two projects - a soya bean plant and the second, an agreement to finance a company which uses bottles to produce synthetic fibres which can then be used to manufacture clothing.

He said the second project was very significant as it involved support in the informal sector.

An agreement was also signed between members of a co-operative and Patel, after his department helped to link the co-operative up with a supplier and assisted its members to obtain discounted purchases for the co-operative.

The department also signed an accord recognising the handing over of 500 solar-water heaters funded by the IDC, to the iLembe municipality in KwaZulu-Natal.

A new local procurement accord would also be signed, with funding of R8m made available to Proudly SA.

The funding would be used to develop a database of South African manufacturers, so that those that wished to buy South African can quickly search for locally-made goods and services.

Finally a local procurement accord was also made with Bantex, a local stationary company which supplies files.

Previously the Department of Economic Development as well as the Department of Trade and Industry sourced its files from a German company, because it was cheaper to do so than to buy from a local company that manufactures similar files - Bantex.

Briefing the media yesterday, Patel said he found himself in a situation because he was using the German files to carry the same speeches he delivered to stakeholders in which he implored them to buy local.

It was then that he approached the local manufacturer and negotiated with them to lower the price they offered stationary firms that supply the department with its files.

With the reduced price the Department of Trade and Industry and the Department of Economic Development will now together save R100 000 a year.

Speaking yesterday, he said the problem with South Africa's procurement system was that it was purely transactional and that one couldn't leverage off this as there was no bargaining or attempt to plan better and carry out bulk buying which could cut costs.

He also pointed to the example of purchasing of buses for Rea Vaya - where buses came from Brazil because the number purchased was too little and made it too expensive to buy locally.

A new way of buying had been introduced by the government to plan better so that bulk buying could be achieved.

In the example of buses, he said cities could pool any purchases they had for new vehicles over the next few years and therefore lower the cost of each bus.

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