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Businesses were stimulated in the first 100 days by: THE REAL ENTERPRISE DEVELOPMENT (RED) FUND Gaining access to finance is one of the most difficult problems experienced by small businesses. Financial institutions have stringent requirements for loans, often requiring security, such as fixed property. Yet entrepreneurs and potential entrepreneurs often have few resources and nothing to offer as security for a loan. Lack of financing is a major factor blocking the emergence of new small, medium and micro enterprises (SMMEs). The Department of Finance, Economic Development and Tourism has therefore set itself a target of raising at least R50 million each year over the next three years to capitalise a loans fund (called "RED Finance") which will provide finance to SMMEs who do not meet the standard criteria for loans from mainstream banks and financial institutions, but who have a viable business plan. Minister Lynne Brown raised R35 million in total for the Red Finance Fund during the 100 days. A prerequisite for a loan from RED Finance will be that the beneficiaries participate in a comprehensive mentoring and skills development programme tailored for new enterprises and entrepreneurs. This will help the enterprises which are financed to be sustainable - and therefore also be able to repay their loans. The Department will also engage in a vigorous campaign to encourage financial institutions to change their standards so that more SMMEs may access conventional loans. THE ENTERPRISE INCUBATOR PROJECT Experts estimate that around seven out of every twelve new South African businesses don't succeed. While some of this can be attributed to inadequate financing, a key factor could also be a lack of mentoring and support. To address this problem, the representatives of the Western Cape's four social partners, Community, Labour, Business and Government, resolved at the Provincial Growth and Development Summit held in November 2003, to launch a trial programme to help 100 existing small medium and micro enterprises to succeed through intensive mentoring and support - called "incubation". This pilot project was launched on 11 August 2004 by the Minister of Finance, Economic Development and Tourism, Lynne Brown. Some 118 businesses have been chosen from across the province to participate in the project, of which almost a third are owned by women and a quarter by young people, while 17% are rurally based. The Department will spend R1,2 million on mentoring and supporting these businesses. Each enterprise will be given a business mentor for an unspecified length of time. The National Productivity Institute (NPI) is also being appointed to undertake a diagnosis of each enterprise. The NPI will then compile a report with a recommendation for each individual business, as well as identifying common needs. This process will take approximately two months. The Department will then issue tenders to service providers who may be able to serve these common needs. SUPPORTING AGRIBUSINESS AND TOURISM PROJECTS The Department of Finance, Economic Development and Tourism is spending R10 million on agribusiness projects throughout the province, as promised by the Premier, while almost R6 million has been allocated to a tourism project. The agribusiness projects were targeted based on the criteria of the Ikapa Agribusiness Fund, which is aimed at the establishment of new and economically viable agri-processing ventures among disadvantaged communities. The agribusiness projects are: - New Beginnings Wines Project (Boland)
- Eikeboom Dairy Project (Boland)
- Inthaba Fruit Processing Projects (West Coast)
- Essential Oils Project (Central Karoo)
- Asparagus (Central Karoo)
- Rural Product Marketing Services
- Regional Opportunities Investigation
- Hydroponics Herb Farm (Central Karoo)
- Mariculture Institute
- Mariculture Project (Hawston)
- Langkloof Honeybush Tea Project (Overberg)
- Fynbos Export Initiative
- Fynbos Certification Project
- Rooibos Intellectual Property Rights
Projects such as the development of the Mariculture Institute, the Fynbos Export Initiative, the Fynbos Certification Project, the Rooibos Intellectual Property rights case, the Rural Products Marketing Services, and the Regional Opportunities are all projects which will begin to broaden the economic base of the Western Cape and increase the export potential of the agricultural industry. The Integrated Tourism Entrepreneurship Support Programme (ITESP) provides an integrated support to tourism SMME's, including access to capital, skills and markets. The intention of the programme is to remove the challenges that prevent transformation in tourism and promote demographic distribution of ownership in the industry within the province. A sum of R4 million was allocated for the 2004/2005 financial year, and a further R1.85 million has been allocated by the Development Bank of South Africa (DBSA) toward this project. Approximately 36 SMMEs will benefit from the programme, 22 of which have already been identified. |
