Remarks by the Minister of Small Business Development, Ms Lindiwe Zulu, at the Development Finance Forum Hosted By the UCT Graduate School of Business
Programme Director,
Academic Director, MCOM Development Finance, Professor Nicholas Biekpe,
Director of the UCT Graduate School of Business, Professor Walter Baets, Executive Chair, WEDI International, Dr Sharron McPherson,
Students,
Distinguished guests,
Ladies and gentlemen
I have been requested by President Jacob Zuma to address this gathering. I am honoured to be able to do so. May I take this opportunity to convey his apology. He would have loved to be here with us.
We proceed from the premise that our funding institutions must be responsive to the needs of a developmental state as well as the reconstruction and development agenda that we are collectively pursuing.
While there is no consensus on what charaterises a developmental state, we must agree that it encompasses, among other things, the task of eradicating poverty and inequality, promoting economic and social justice as well as equitable distribution of wealth. This should resonate well with South Africans given the legacy we have inherited from our ugly past. It is a legacy of impoverishment, poverty and lack of access to the nation’s resources. It is in this context that the Brics Bank was conceptualised. The seeks to reverse the legacy centuries of underdevelopment as well as the inability of the current global finance agencies to appreciate the unique developmental challenges confronting developing nations.
We expect the Bank to mobilise resources for infrastructure and sustainable development projects in a way that will complement existing efforts of multilateral and regional financial institutions for global growth and development.
Back home, our department continues to face problems with accessing funding from the main commercial banks, based on our people not having adequate collateral, and a lengthy track record of running formal businesses. But, this a chicken and egg story, because without gaining access to capital, informal businesses will remain small and vulnerable, unable to develop the very track record and asset base the banks require.
In order to ensure access to funding for small businesses and co- operatives, the Small Enterprise Finance Agency (SEFA) has migrated to the department. This will ensure a more integrated approach towards extending support to SMMEs and co-operatives. From inception to date SEFA has approved loans in excess of R2billion to small enterprises. Going forward we will assess the impact of this expenditure in line with our developmental agenda.
The Department is currently reviewing the guidelines for the Black Business Supplier Development Programme to ensure that it is aligned to our mandate. We will also develop a business rescue strategy aimed at supporting SMMEs and Co-operatives in financial distress.
The Youth, Women and People with Disabilities’ Business Support Scheme has been conceptualized as a response to the specific challenges faced by enterprises owned by these targeted groups, especially at start-up level.Women-owned enterprises and youth-owned enterprises have been allocated R30 million each in the current financial year. This funding instrument will assist enterprises to acquire critical assets and equipment required to grow and expand their business operations.
