The Township and Rural Empowerment Programmes (Trep), under the auspices of the Small Enterprise Finance Agency (Sefa), held a gathering at the Orlando Communal Hall, Soweto, on Wednesday 6 December.
Trep supports informal, micro, and small enterprises and co-operatives in the rural areas and township economies.
Kasi business owners were introduced to available channels to help them get finance, they were taught to be business-wise, and were given tips on how to turn their operations into success stories.
The meeting was aimed at providing finance and business development support to various sectors and helping promote their participation in the mainstream economy.
Delegates were educated on the role and function of Sefa and the importance of reviving local industrial parks and plans to turn them into proper revenue-generating business hubs.
The mining group, Harmony Gold, was described as the key role player in the local business upliftment process. Coin Invest is also one of Sefa’s partners in various community-oriented projects.
The small enterprises that qualify for funding include those specialising in clothing and textile, bakeries and confectionaries, shisa nyamas and cooked food, retail (including restaurants, car washes, and general dealers, among others), automotive, personal care, and artisans. Persons living with disabilities, veterans and the youth are also covered by the programme.
“Local government and the metros need to have a symbiotic relationship,” Sefa CEO, Lindani Mseleku, told attendees.
“It’s important for local businesses to form partnerships. This will help them to be strong and enable them to break the back of foreign spaza shop owners, who form groups that buy goods in bulk and at discounts at wholesalers. We too can do the same.”
Mseleku stressed the importance of business assessment every six months.
“This is a monitoring system that helps Sefa keep those who have been funded closely in check. It also helps us know whether the funds provided are used for what they were meant for,” he said.
Mseleku also highlighted the importance of establishing warehouses closer to Ekasi. He said Sefa was working closely with the major banks in the country to help the small enterprises learn the business of running a business.
“We also have a Youth Challenge Fund as part of our development process. But a lot of mentoring is needed in this regard – because, with the youth left to their own, a lot can go wrong with the funds provided.”
He told an anecdote about a youngster who received money to fund a project and splurged it at a Sandton drinking hole, instead.
To get financial support, kasi businesses are required to meet specific criteria.
These include:
• Registering with the CIPC.
• The business should be 100% South African-owned.
• Employees should be 70% South African – if not, non-South African employees must have valid work permits.
• It should operate in a township or a rural area.
• The business owner should possess a business licence.
• The business should be registered with the South African Revenue Service and the Unemployment Insurance Fund.
• The enterprise should also have a valid business account.
The scheme also covers:
- Cost of production inputs. These include materials, equipment, machinery, tools, etc.
- Working capital, including rent, salaries, etc.
- Help with compliance and technical skills improvement – labeling, meeting industry standards, and quality checks.
- Provide business and financial management training.
- Facilitate access to bigger markets.
According to Sefa, the financial support package is structured at a minimum value of R1 million consists of a maximum of R1 million as working capital, and cost of equipment, and is paid directly to the supplier. The financial package will also be offered in the form of “blended finance” with 50% of the total approved amount in the form of a grant amounting to R1 million.
The loan is repayable over 60 months. This depends on the business’s cash flow. Interest is fixed at a rate of 5%. The loan has a six-month moratorium.
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