Honourable Chairperson
Ministers and Deputy Ministers Present
Members of the Portfolio Committee on Small Business Development
Director-General and senior managers of the Department of Small Business Development
Board members and Executives of SEDFA
Distinguished Guests
Ladies and gentlemen, and fellow South Africans
Entrepreneurs
Honouring the past, delivering the future: Advancing Economic Transformation through Small Enterprise Development for the Benefit of All.
Honourable Chairperson,
2026 is a special year in the South African calendar.
On the 16th June 2026 we will commemorate 50 years since the 1976 Soweto Uprising which profoundly changed the country’s socio-political trajectory and set in motion processes of mass mobilisation which ultimately brought the apartheid state to its knees.
On the 9th August we will also commemorate 70 years of the Women’s March – a defining moment in the anti-apartheid struggle - in which more than 20 000 women marched to demand the repeal of the Pass Laws. “You strike a woman you strike a rock”.
We owe our political freedom to those youth and women. It is incumbent on us as today’s leaders to ensure that this political freedom translates into economic freedom, especially for youth and women who bear the brunt of unemployment and inequality.
It is also 30 years since we adopted the Constitution of the Republic of South Africa, which laid the foundation for dignity, equality, freedom, and economic participation for all our people.
Budget Vote 36 gives practical expression to Section 22 of the Constitution which guarantees freedom of trade, occupation, and profession. It is about expanding opportunity, restoring dignity, and building an economy in which every South African — regardless of geography, gender, age, or social background — can add value and participate meaningfully.
The National Development Plan is clear that growth and jobs will come from small enterprises – just under 90% of new jobs and upward of 60% of new economic value. The evidence is clear: small enterprises are the largest employer in this economy. They are the entry point into economic participation for the majority of South Africans. They are where first-generation entrepreneurs build generational wealth. They are where transformation happens.
As the DSBD portfolio, we have a target of supporting 1 million MSMEs and co-operatives over this 7th Administration.
We are on track. During the past financial year we supported 288,123 MSMEs, with 117,134 enterprises receiving financial backing and 170,989 enterprises benefitting from non-financial intervention and development.
Honourable Members
We meet at a time of global uncertainty. Geopolitical tensions, supply chain disruptions, and rising costs continue to reshape the global economy. These pressures are felt most acutely by small businesses, farmers, and entrepreneurs across our towns, townships, and rural areas.
This reality reinforces a simple truth. We must build a resilient, locally anchored economy capable of withstanding external shocks.
At the same time, disruptions bring opportunities for entrepreneurs who provide innovative solutions to the challenges we face. I see this everyday as I interact with entrepreneurs from the dusty streets of Kuruman to the industrial heartland of Ekurhuleni.
Today I will speak largely to numbers. To what we have achieved, what we are planning and the budgets we have allocated. But behind each of these numbers is a South African entrepreneur.
I wish I had more time to introduce you to the entrepreneurs we serve. I will just touch on two, Ms Mahapa Raisibe Matlhako, who runs a wholly Black, youth and woman-owned manufacturing company in Robertsville, Roodepoort. She manufactures personal hygiene products, soap, health and wellness items with an uncompromising commitment to quality and safety. She is currently a private label manufacturer for Boxer Super Stores producing three types of soap.
But fulfilling a contract at national retail scale requires capital that a young Black woman manufacturer, however talented, could not access. SEDFA stepped in through its Small Enterprise Manufacturing Support Programme, providing R13.8 million. This created thirty-two new jobs.
That is not just enterprise development. That is supply chain transformation. And this is what a young woman in Roodepoort is delivering — with SEDFA behind her.
Hon Members, allow me to also mention Ms Thenjiwe Tsabedze, a Black woman who acquired the Protea Hotel in Mahikeng and renamed it to Indalo. Indeed, the new owner is a Black woman entrepreneur, backed SEDFA and other financial institutions to the tune of R80 million.
Honourable Members, this is not a small moment. A Black woman now holds the title deed to a property that, under a different political order, she could never have entered through the front door. Now she signs the contracts. Now she sets the vision. Now she employs the staff and shapes the guest experience.
I wish I had time to tell more good stories like this. There are many.
Honourable Chairperson,
Our 2026/27 Budget is anchored around our priorities for this 5- year term of Government, and which represents continuity in what I tabled last year.
First, we will continue with reforms to reduce red tape and improve the ease of doing business.
We commend the Minister of Finance for increasing the compulsory VAT registration threshold from R1 million to R2.3 million. This is a major victory for small businesses across the country.
This will ease the cost of doing business for MSMEs, as continually pushed by His Excellency President Cyril Ramaphosa. In his opening address at the recent National LED Summit which we hosted with SALGA and COGTA, he said “MSMEs must not be burdened by long winded administrative processes. MSMEs just want to trade and must be allowed to trade. They must not be taken from pillar to post to register or licence their businesses. We must make it easy to start and operate a business”.
Honourable Members
This year the Department of Small Business will introduce a one stop shop digital platform for business licencing. We will continue pushing for reforms on 5 of the 25 pieces of legislation we identified that place administrative burdens on MSMEs. We have finished consultations on the Business Licensing Bill and will soon bring this Bill before Parliament and the NCOP. While we wait for Parliament to finalise the appointment of the Small Enterprise Ombuds, we have appointed minimum staff in the Ombuds Office and have established a complaint register.
Honourable Chairperson
Our second budget priority for this year is to continue to build the township and rural economy
Entrepreneurs play a critical role in South Africa’s townships and rural areas, despite the many constraints they face including access to finance, security concerns, the lack of business infrastructure, and competition from illegal foreign owned businesses and large retailers and supermarkets encroaching on local markets.
To support township and rural enterprises, we have developed the Township and Rural Economic Development and Revitalisation Policy.
We will also be scaling our offerings as the DSBD portfolio for township and rural enterprises, building on the successes of 2025/26 where we disbursed more than R829 million to over 111 000 MSMEs through the Township and Rural Entrepreneurship Programme.
The funding limit of TREP has now been increased from R1 million to R3 million to broaden access and deepen impact. This year we have allocated R710 million.
Another significant intervention we are making in the township and rural economy is through our Asset Assist Programme. This is a grant-based intervention to support small and micro enterprises which cannot afford to take on debt with productive assets, equipment, machinery, and operational capability. Last year we supported 938 MSMEs to the value of R190 million.
This year we have allocated R215 million to provide a minimum of 860 MSMEs with productive assets that enhance their capacity, productivity, and competitiveness.
The Informal and Micro Enterprise Development Programme provides equipment and productive assets to informal micro enterprises. Last year we supported 2940 beneficiaries.
This year we plan to support 3000 micro enterprises and have allocated R53.5 million.
Our Spaza Shop Support Fund, which we implement together with the DTIC, supports spaza shops with stock acquisition, formalisation, compliance, and operational sustainability. To date 1316 have been approved for funding through the Fund to the value of R79.6 million.
This year we will exhaust the R70.4 million balance of the R150 million we contributed to the Fund.
We will continue to provide both financial and non-financial support to co-operatives, with a target of supporting 50 co-operatives in the 2026/27 financial year. An amount of R63.5 million has been allocated.
The other key instrument we have deployed to build the township and rural economy is the Business Infrastructure Support Programme (BISP), which builds MSME Hubs, supports industrial parks revitalisation, and provides equipment, energy solutions and shared production infrastructure for MSMEs and co-operatives.
Last year 36 applications were approved for equipment and machinery support, 11 applications for built infrastructure; and 9 MSME hubs for refurbishment and repurposing. We identified and prioritised these hubs together with sub-national spheres of government. I will provide more details of specific projects prioritised and planned for 2026/27 when I table this Vote 36 Budget to the NCOP.
This year we will allocate R314.3 million to BISP to support 10 Hubs and Shared Infrastructure Facilities and support a minimum of 50 MSME’s and co-operatives with essential equipment, machinery, technology, and energy solutions.
Without business infrastructure, there is no access; without access, there is no growth.
There can be no doubt amongst Honourable Members, that we are committed to economic redress and undoing the legacy of apartheid’s spatial inequality.
Honourable Chairperson
Our third priority is to continue our efforts to expand market access.
Besides townships and underdeveloped rural areas, the other legacy bequeathed upon us by apartheid is a highly concentrated market with very high barriers for new entrants. I know some among us today choose to ignore this fact.
We have been active in addressing market failure.
Through SEDFA we funded sustainable doctor and nurse-led MSMEs in township and rural areas creating jobs for unemployed healthcare professionals while improving health access for communities. We funded construction sub-contractor development, building the pipeline of Black-owned contractors for South Africa's infrastructure programme. We funded inclusive technology deals, supporting MSMEs that are service providers and connectivity enablers in their own communities, extending digital access to rural and township areas that commercial providers have not reached.
Last year we placed 250 products on shelves and facilitated domestic contracts or purchase orders for 293 MSMEs. We supported 2809 businesses with local market readiness and 890 with export readiness.
This year we will intensify our efforts.
Government has promulgated the Public Procurement Act and associated regulations. As DSBD, we will provide incubation support, standards and quality assurance, and financial support including supplier guarantees as we partner with departments and state-owned companies to build their MSME supplier capabilities.
We will continue our work with Proudly South Africa.
We will implement a re-engineered Small Business Exporter Development Support Programme which is more outcomes-focused, and with more focus on trade intelligence and strategic international markets with opportunities for MSMEs. We will also support aggregators which provide economies of scale that individual MSMEs cannot achieve alone.
This year we will facilitate domestic and international market access for 3730 MSMEs and cooperatives.
This will strengthen local manufacturing, promote import substitution, and position South African enterprises to compete globally.
We must move from being a nation that consumes to a nation that produces.
South African MSMEs must not just participate in the economy. They must lead it.
Honourable Chairperson
As our fourth priority we will continue to expand access to finance.
We are currently implementing the MSME and Co-operatives Funding Policy, and are scaling up our financial offerings.
During the past financial year, SEDFA prioritized previously disadvantaged groups and underdeveloped areas:
- Black-owned enterprises received R2.3 billion.
- Rural enterprises were injected with R1.2 billion to stimulate regional economies.
- Women-led businesses were empowered with R1.2 billion.
- Youth-owned enterprises received R501 million.
- Township economies were revitalised with R383 million.
This year we are going bigger and tailoring our financial products for niche sectors and constituencies. This includes:
- The recently launched Imbali for Her programme will expand affordable finance and business support for women-owned enterprises, backed by R300 million this year.
- As announced last year, a revitalised Youth Entrepreneurship Fund, valued at R300 million, to be launched during Youth Month to support young entrepreneurs through finance, incubation, mentorship and innovation support.
- A R150 million Creative Sector Fund will be launched in the second half of the year, providing essential funding for our creative entrepreneurs.
- The redesigned R100 million Inyamazane Fund for Military Veterans, is scheduled for launch in July 2026.
- A R300 million TIA-SEDFA Innovation Fund will be launched — to commercialise innovative ideas for scalable growth.
- We will partner with the Department of Mineral and Petroleum Resources to create a Fund to support the coordinated and impactful development of artisanal and small-scale mining.
- Through Khula Credit Guarantee, we will provide supplier and credit guarantees to the value of R1 billion.
We have begun transforming not just who receives finance, but who provides it.
Honourable Members, the approval of R70 million in new facilities to 4 new Black-owned MFIs in this past financial year brings the total number of Black-owned MFIs on SEDFA's books to eight. Eight balance sheets being built by Black South Africans who will, over time, become the financial backbone of the communities they serve.
Honourable Members
As our fifth priority we will continue to expand business development services and incubation.
We made much progress in 2025/26. The National Entrepreneurship Strategy we developed tackles the structural barriers to entrepreneurship, particularly for young people. The Incubation and Business Development Services Policy brings long-overdue coordination, standardisation, and quality to enterprise support.
These are not just policies. They are instruments of transformation that must translate into measurable outcomes on the ground.
During the past year, we rolled out extensive Business Development Services:
- 29,497 entrepreneurs received intensive training and mentorship, and
- 53,769 individuals were reached through entrepreneurship awareness programmes.
We also launched the Northern Cape Agricultural Incubator, a major milestone for an historically underserved province, which will create more than 200 direct jobs, with additional indirect opportunities across the agricultural value chain.
And through SEDFA, we invested R78 million towards the establishment of 30 food market squares linked to the R2 billion Mpumalanga Fresh Produce Market. These food market squares are projected to create more than 426 jobs through supporting 120 MSMEs.
We are working to scale support for MSMEs in the professional space, and this year will be establishing a medical incubator and manufacturing hub.
This year we will formalise 11000 informal enterprises, provide entrepreneurship awareness to 50 000 budding entrepreneurs, provide business development interventions for 26 000 township and rural-based enterprises, and business skills training for 25 000 small businesses. .
Honourable Members
Last year we hosted both the Global SME Ministerial bringing together 66 countries, as well as the Startup 20 Summit, where we succeeded in placing MSMEs in the G20 declaration for the first time.
What we learned from these global events is that effective entrepreneurship ecosystems require integrated digital infrastructure, digital payments, financing mechanisms, and enabling regulations to unlock growth and innovation at scale.
This aligns with our sixth priority for 2026/27 – the continuation of digital transformation.
Last year I announced the establishment of a one-stop-shop digital platform. Significant progress has been made on OneSEDFA, which will be rolled out this year. OneSEDFA is an integrated digital platform that introduces alternative credit scoring and combines funding, business development support, and credit guarantee services into a single digital ecosystem, to improve turnaround times and track the progress of applications in real time.
We have also developed the MyCBI digital banking platform, a purpose-built platform for Co-operative Banking Institutions in underserved communities.
Honourable Members, our seventh and final priority for the year is to continue our efforts around eco-system coordination.
A fragmented ecosystem will always produce fragmented outcomes. No matter how well individual institutions perform, if we operate in silos, the collective impact will remain limited.
To strengthen our leadership and co-ordination role in the eco-system, we are developing the National MSME One-Plan, which will strengthen eco-system partnerships and accountability around measurable commitments aligned to the NISED and the National Entrepreneurship Strategy.
Last year we convened several eco-system meetings in various provinces and recently hosted the National LED Summit.
This year we will continue to hold industry roundtables and engage with all ecosystem role-players – multilaterals, Government, banks, private corporates, SETAs, universities, and others - to solicit commitments to scale support for MSMEs and co-operatives. These commitments will be announced at the Presidential MSME Investment Conference to be held in November, together with our National MSME and Co-operatives Awards.
We will also continue to multiply our impact as the DSBD portfolio through strategic partnerships, for example with the Construction Industry Development Board, the National House of Traditional and Khoi-San Leaders, the Department of Mineral and Petroleum Resources, and the South African Local Government Association. We are also actively working with universities in developing the MSME Research Agenda.
SEDFA has also during this past year onboarded 24 ecosystem partners to scale its offerings.
Honourable Chairperson,
I hereby present the Department's budget allocation for the 2026/27 financial year amounting to R3.036 billion.
Of this amount:
- R2.154 billion is allocated to transfers and subsidies.
- R277.1 million is allocated to compensation of employees.
- R597.2 million is allocated to goods and services; and
- R7.8 million is allocated to capital expenditure.
SEDFA receives R1.899 billion of the transfers and subsidies allocation.
This Budget Vote reflects our commitment to measurable impact, ensuring that public resources translate into more supported businesses, more jobs created, and a transformed economy with higher levels of inclusion.
I thank you
