This resolution followed an acknowledgement by all the participants at the summit, that for economic development to take place, the SMME sector has to be properly structured and supported.
Participants were also aware of estimations that 7 out every 12 new South African small businesses fail.
For instance , the Global Entrepreneurship Monitor reports of 2001, 2002 and 2003, that compared SA to about 37 countries, claim the following:
- Men are twice more likely than women to be engaged in an entrepreneurial venture;
- 1 in 10 adults in a metropolitan area is engaged in an entrepreneurial venture, compared with 1 in 22 in small towns and only 1 in 56 in rural areas;
- 1 in 22 black adults is engaged in an entrepreneurial venture, compared with 1 in 12 coloured adults, an 1 in 10 Indian and white adults;
The SMME sector is therefore critical and needs nurturing.
During his State of the Province Address, the Premier reiterated the need to introduce support programmes for SMME. He promised that within three months various projects aimed at doing exactly this would be launched within the first 100 days of this new government.
Well over the last three months the Department of Economic Development and Tourism has been burning the midnight oil and hard at work to ensure that we meet the targets we have set ourselves.
The challenge was that we had to come up with programmes focussed on assisting small business development, especially those enterprises that are owned by black people, the youth, women, the disabled and mainly based in rural areas.
In the last three months we have introduced four programmes that have pumped R50 million into the Western Cape SMME sector.
- Through the Enterprise Incubation Programme we have selected 118 businesses that will be mentored and supported at a cost of R1, 5 million.
Women own 32,2% of the businesses selected. We have also cast the net wider and as a result 25% of the businesses are owned by youth entrepreneurs, while 2, 5 % belong to disabled entrepreneurs. Most important though is the fact that 17% of the businesses come from rural areas of the Western Cape.
We are currently in the process of appointing the an organization to undertake a diagnosis of each enterprise we have selected. This organization will then compile a report with recommendation of the needs of each individual business.
- We have raised R35 million for the Red Finance Fund to capitalise a loans scheme for SMME's. The Red Finance Fund will provide finance to SMMEs who do not meet the standard criteria for loans from mainstream banks and financial institutions. A target has been set of raising at least R50 million a year over the next three years to fill the gap .
- We have allocated R10 million for small Agri-Business projects throughout the Western Cape. The successful Hydroponics Plant facility in Beaufort West was used as a model for the projects we have chosen. These agri-businesses are located throughout the province .
- We have allocated R4 Million for the Integrated Tourism Entrepreneurship Support Programme (ITESP). The Development Bank of Southern Africa has allocated a further R1, 85 Million to the project. ITESP provides an integrated support to tourism SMMEs , including access to capital, skills and markets.
The intention of the programme is to address the challenges that prevent transformation in the tourism sector. Most importantly, ITESP will promote the demographic distribution of ownership in the industry within the province. Approximately 36 SMMEs will benefit from the programme, 22 of which have already been identified.
These projects prove once again that we truly are serious about making the Western Cape a home that benefits all its' citizens. As indicated they are pilots and we are sure that their success will be the beginning of bigger and better opportunities for other businesses.
Thank You.
