E Thabethe: Women's access to finance conference

29 March 2007

Programme Director Ms Mmabatho Matiwane
Deputy Director General EIDD, the Department of Trade and Industry (dti), Mr
Lionel October
Head of Gender Entrepreneurship Markets, International Finance Corporation
(IFC), Ms Amanda Ellis
National Manager: Small Business & Women's Markets: RBC Royal Bank: Ms
Kristina Depencier
Chief Executive Officer South African Micro-finance Apex Fund (SAMAF), Mr
Sitembele Mase
Team Leader of the dti Women's Fund, Mr Rindai Jaravaza
Executive Director-DFCU Uganda, Mr Moses Kibirige
Director�Equity Bank Kenya, Ms Winnie Imanyara
Officials from the dti
Officials from IFC
South African Women Entrepreneurs' Network (SAWEN) members
Women in Business
Ladies and gentlemen

Welcome

Good morning to you all. It is indeed a great honour for me to finally be
able to be a part of this conference which is a stepping stone to us in
declaring this year "the year of improving South African women's access to
finance." Allow me Programme Director, to remind the house that the issue of
access to finance is an international problem faced by many countries, both
developed and underdeveloped. In SA both public and private sector, in trying
to come up with possible solutions, have deliberated on this problem in
different forums. Sadly so, the problem seems to be persistent due to various
factors including the dynamisms of the Small Medium Micro Enterprises (SMMEs)
sector itself. It is my personal belief that not only because the solutions
that have already been proposed are not good enough, but also perhaps the fact
that small business's needs are forever changing.

Definitely in SA this has been the case. The dynamism that I am refereeing
to refers to the characters of the small business itself. This is made up of
the size of the enterprise, its turnover, the product produced/services
rendered and more importantly the profile of the owners and the managers of
those businesses.

In SA today, immediately after the new dispensation we have seen an
increasing number of new SMMEs who mainly come from the previously
disadvantaged background. These happen to be black females coming from
peri-urban and rural areas with some of them being physically disabled and
young. These all make up what is referred to as "the second economy," all of
these groups faced by the common challenge, being lack of access to finance. As
much as the challenge might seem common, it requires different interventions of
the same solution. Hence today's conference is focusing on addressing a
challenge faced by one specific group who happen to be women.

Ladies and gentlemen, as already stated in my foreword, it is my personal
and professional belief that facilitating equitable and easy access to finance
is key for us to unlock the entrepreneurial potential amongst South African
women. Fortunately, this view has been well supported by women from all over
the country who have actively participated in our consultation drive as part of
developing the National Strategic Framework on Gender and Women's Economic
Empowerment. It is no secret that, historically, the South African financial
markets, both from the public and the private sector, have and continue to be
gender blind and thus a major obstacle for women to start, grow and strengthen
their enterprises. This happens to be the case with the traditional banks, our
very own dti financial institutions and the micro-lenders. In all their
interaction with women, all of these institutions continue to have lending
conditions that are unfavourable to the majority of SA women owning and
managing small to medium size enterprises. This is a situation that, if not
attended to, can negatively affect our economy by continuing to fail to attract
new entrants to the economy as set by our current national economic
objectives.

Programme director, ladies and gentlemen, today's conference is part of a
long process we embarked on involving an extensive dialogue held between women
in business, government and private sector. We, at the dti, have been at the
forefront of coming up with solutions on how best to support and grow South
African businesswomen. One of the solutions include establishment of the
women's bank, which to some was too idealistic but not unrealistic in my
opinion seeing that it has been achieved in other countries including Egypt and
Canada. In an attempt to mainstream and integrate these issues as one of our
economic imperatives, the issue has also been adopted as one of the major
deliverables in last year's adopted strategy on engendering Accelerated Shared
Growth Initiative for South Africa, championed by our Deputy President, Ms
Phumzile Mlambo-Ngcuka. In ensuring that this happens, we as the dti have
further identified this as one of our deliverables in the already finalised
strategic framework on Gender and Women's Economic Empowerment.

As always expected, it is always important to investigate the extent of the
problem to be able to come up with the right solution. In doing this we had to
seek assistance and collaboration of our partners as part of the Public Private
Partnerships. Fortunately as it has happened in other instances, the
International Finance Corporation's Gender Entrepreneurship Markets, under the
leadership of Ms Amanda Ellis, we managed to successfully conduct an in depth
study on SA women's access to finance. I believe the full report of this study
is in your packages. It was officially launched by International Finance
Corporation (IFC) last year and I urge all of you to read it. Its contents are
very informative and its conclusions are critical in terms of addressing the
other facets of this problem.

Programme director, ladies and gentlemen, allow me to share with you in
brief what we as the dti have also been doing to address this issue at a broad
level. Ladies and gentlemen access to finance by small enterprises has been a
thorny issue since the adoption of the White Paper on the Development and
Promotion of Small Business in the country. Recently we have been working with
banks to see how they can support the development of competitive economic
clusters within and across provinces. The banks are examining the possibility
of providing partial funding for the clusters. In the process, banking
initiatives can be introduced to support community-based economic development
plans and individual enterprises.

Through the Apex Fund, the dti seeks to remove institutional constraints to
successful SMME lending and the mobilisation of community. The fund distributes
loans of up to R10 000, serving the micro-finance market. The fund has been
launched in all provinces and has disbursed more than R10 million in loans
through micro-credit outlets. Additional partner organisations are ready to
disburse and the fund is set to expand its business partner portfolio to fifty
by the end of the year. This will enable it to disburse its full-allocated
budget by year-end, however progress will depend on improving the readiness of
partner organisations.

In February 2006, Khula and Business Partners created an instrument for SMME
start-up funding focusing on the provision of loans of R10 000 to R250 000 to
black entrepreneurs which is also up and running in three provinces and has
disbursed an amount of R6 million in two months, demonstrating further progress
in filling this critical funding gap. In addition, the Khula Credit Indemnity
Scheme has also been successfully revised with commercial banks. Khula has also
successfully launched the first ever South African Start-Up Fund, with an
initial capital amount of R150 million, specifically for the benefit of new
black entrepreneurs.

The Industrial Development Corporation (IDC) has already allocated R1
billion to the SMME sectors where 54 projects to the value of R315 million have
already been approved. There is also a healthy pipeline of projects (in excess
of R500 million) and it is envisaged that the entire amount of R1 billion has
been utilised last year alone. I would also like to inform the house that the
National Empowerment Fund is open for business with a new CEO and a Board. I am
pleased to report that transactions to the value of R491 million have been
approved for the period up until the end of March 2006.

Ladies and gentlemen, with regards to women, you have heard us mentioning
the establishment of the much-anticipated women's fund. In pursuit of this
major intervention, the Gender and Women's Empowerment Unit has been working
tirelessly together with some of our partners like the Women's Development
Banking. It is with great relief to publicly announce that indeed, impressive
progress has now been made towards the establishment of this fund. As part of
sharing with you, you will get to hear the strategic importance of establishing
this fund. This importance has provided us with the basic foundation on how the
fund should be established. It is one of our good intentions that the fund
addresses the main problems experienced by women in accessing finance. Further
we intend to use it as a leveraging tool to other government and private sector
related funding mechanisms. Its unique selling point should be the criteria to
access, the specific type of enterprises it will support and more over the
difference it will make in further growing and diversifying women's enterprises
in this country. Since the study has already confirmed that women borrowers
have lower default rate than men, we are therefore convinced that women will
continue to work with us in ensuring the fund's growth and sustainability. It
is on this basis that I now declare this conference open and hope to see you at
the next forum where we will be launching the fund itself.

I wish you well in your deliberations and thank you for joining us to
day.

Issued by: Department of Trade and Industry
29 March 2007