The Hermanus launch is the first of a series of launches that will see the Provincial Government open six new RED Door offices over the next two weeks. The other RED Door offices are in Atlantis, already operating since 1 March as well, Paarl, Knysna, Oudtshoorn and Beaufort West.
The addition of these RED Door offices is just one part of the Province’s R110-million Real Enterprise Development (RED) strategy that recognises the urgent need to provide support to small, micro and medium-sized businesses – SMMEs – those with the least access to opportunities and finance. In fact, finance has been identified as the single most difficult problem to overcome because of SMME inability to offer meaningful collateral. The RED Door offices plan to redress this through a range of inputs, not least through a R30 million loan fund to underwrite loans to those who do not meet standard banking or financial institution requirements.
This is not a provincial money giveaway. Beneficiaries must participate in a comprehensive mentoring and skills development programme tailor made to meet their individual needs. This kind of programme is recognised as adding to the sustainability of the business venture and facilitating the environment for the loan to be repaid. However, the Provincial Government does not intend to continue the role of loan provider indefinitely. Instead the government will work with banks and financial institutions to encourage them to be more consumer-friendly to loan applications from SMMEs.
“Without small business development, the economy stagnates, employment declines and ultimately the general standard of living deteriorates. A study done by my Department has shown that if properly supported the SMME sector could generate between 50 000 and 60 000 jobs a year in the Western Cape,” said MEC Brown.
“The Provincial Growth and Development Summit (2003) was aware of this and resolved to establish the conditions that would allow for the creation of 100 000 net new jobs by the year 2008. If we are to realise this goal, then we don’t have a choice but to ensure we do all in our power to support this sector. “
Success of the four RED Door offices opened to date can already be measured in terms of the 2 428 people advised or helped up to the first week of April. Of this number, many were helped to access government tenders; so far worth R8.8 million and counting. While the aim of the Provincial Government is promotion of broad-based black economic empowerment (BEE) tied to the population of the Western Cape, a breakdown of clients using the RED Door offices show that 35% are women, 25% are youth, and 1% is disabled.
The majority of entrepreneurs fall into the micro or survivalist market, and 60% are engaged in the retail sector. Construction is also a popular selection. The main requests for advice or help – which is offered in all three provincial languages – are related to:
- business plan writing
- access to finance
- training and capacity building; and
- access to and assistance with tenders.
The Provincial Government hopes to build on this by also providing on-the-job training.
RED Door offices also offer:
- An effective and reliable network of business support service providers.
Business opportunities. - Identification of appropriate manufacturing accommodation and key trading sites.
- A data base to provide customised printed information on economic, geographic and demographic areas of opportunity.
- An Internet café to plug into global business opportunities.
The Hermanus RED DOOR office reports that already it has attracted the attention of a group of retired business people who have offered to mentor and train entrepreneurs free of charge. This kind of partnership – established business helping emerging business – is just one of the areas of cooperation that the Provincial Government is keen to engage in. Real Enterprise Development will also work with provincial partners in government, business, non-governmental organisations and the private sector to bring in as wide a spread of access to expertise as possible.
In her Medium Term Budget Policy Statement 2005-2008, MEC Brown spoke of unemployment and poverty as the greatest challenges to the Western Cape economy. This is why the Provincial Government initiated a policy called iKapa eliHlumayo, a Xhosa phrase meaning “Growing the Cape”. The RED Door programme is just one of several initiatives that make up iKapa eliHlumayo. This, along with the Provincial Government’s focus on equity issues with interventions in areas of BEE, Women’s EE, Youth EE and economic empowerment for people with disabilities, rural dwellers and workers, is seen as the best delivery method to promote increased economic growth, employment, and participation for all to make concrete the Premier’s vision of the Western Cape as a home for all.
Further information on the RED Door programme can be obtained at <www.capegateway.gov.za/reddoor>. Here you will find a RED Door business toolkit that lets you click through information from starting a small business to accessing business opportunities. You can also get contact information on a RED Door nearest you by phoning Cape Gateway on 0860-142-142
Enquiries may be directed to:
Thabo Mabaso
Media Liaison Manager/Spokesperson
Ministry of Finance, Economic Development and Tourism
Provincial Government of the Western Cape
Tel: 021 483 3531
Cell: 083 255 5689
E-mail: tmabaso@pgwc.gov.za
Communications and Corporate Image Management
Department of Economic Development
Provincial Government of the Western Cape
Tel: 021 483 9223
Cell: 072 295 8614
E-mail: pconstance@pgwc.gov.za
