There was glimmer of hope this week as small business development minister Stella Ndabeni-Abrahams promised better funding for the sector.
Ndabeni-Abrahams told a mini plenary of the National Assembly on Tuesday that the department was finalising policy that would make it easier for small businesses and co-operatives to get funds.
“Our work here is aimed at reducing the prevailing credit gap estimated to be R346bn, honourable members. That is the gap in funding SMMEs in SA,” she said when presenting her department's budget.
The minister said the proposed SA SMMEs and co-operatives funding policy would prioritise "building a sustainable loan [scheme] through the expansion of credit and decreasing impairments" through the Small Enterprise Finance Agency (Sefa).
She said they wanted to speed up turnaround times for applications to Sefa after receiving complaints. Ndabeni-Abrahams added that R200m, of the R2bn allocated to Sefa for the 2022/23 financial year, would be distributed to 84,831 SMMEs and co-operatives across the country.
We welcome this initiative by the department as small businesses really struggle to get funding from commercial banks, the funds would assist in that sector. However, can we have specifics like timelines, minister, how long it takes to get funds for Sefa now, and how much that would improve after the policy?
The benchmarks would be important to hold the department to account. It is all well and good when plans are announced but the real test is when the funds reach the people they are intended for. The department would need to eliminate red tape to ensure funds are released to businesses in time.
Just this morning Newzroom Afrika news reported that flood-ravaged KwaZulu-Natal was still waiting for the funds promised by the national department after the president declared a state of disaster. In such instances, one would expect funds to be released almost immediately for relief and reconstruction.
That such aid is mired in red tape and results in delays is indicative of the gulf between declaration of good intent and delivery often experienced in bureaucracy. Why is it taking this long to release funds even during a state of disaster?
The department would also have to put measures in place to protect the funds from corruption. As we all know, it is one of the main things slowing down service delivery for our government. The proof of the Ndabeni-Abrahams small business funding pudding will indeed be in the eating – that is delivery.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.