OVERVIEW Development finance and SMME support Seed money is available for forestry ventures and much more. SECTOR INSIGHT Recycled pineapple waste is living again as outdoor furniture. • SEDA opened a new technology research and development centre in 2016. There are a wide range of options available for the financing of small business ventures in the Eastern Cape. The big retail banks have desks dedicated to promoting small enterprise and several agencies have a specific focus, for example the Eastern Cape Rural Development Agency (ECRDA). In promoting forestry enterprise, the ECRDA reported in 2015/16 having made R15-million available, while the Eastern Cape Development Corporation (ECDC) had contributed R8.3-million and the Development Bank of Southern Africa (DBSA) R64-million. This is a good example of the variety of funding mechanisms available. The Industrial Development Corporation (IDC) is another financing institution that is very active in the Eastern Cape. Several development agencies receive support from the IDC: Nelson Mandela Bay Development Agency; Blue Crane Development Agency; and Nkonkobe Development Agency. Two of the ECDC’s seven business units are devoted to small business: Development Finance and Enterprise Development. The ECDC has several financial products tailored to meet the various needs of business, entrepreneurs and investors, ranging from short-term to long-term finance and small- and micro-loans. The ECDC and the Technology Innovation Agency (TIA) jointly run the TIA-ECD Innovation Seed Fund Programme, which aims to identify and co-fund earlier stage technology innovation projects in the Eastern Cape. In the first three quarters of 2015/16, the ECDC disbursed R72.1-million to 198 small businesses, creating about 1 415 jobs. Most of the money went to rural areas, including the OR Tambo (28%) and Alfred Nzo (14%) and Amathole (4%) districts. Sixtyone youth-owned businesses received R20.7-million and R15.5-million went to 58 womenowned businesses. In its role as a provider of advice, the ECDC assisted a delegation from the Amahlubi Traditional Council when it attended the World Forestry Congress. This is part of the DBSA Jobs Funds Forestry projects. Help Desks have been established to support small business in Port Elizabeth and East London. One of the companies supported by the ECDC, outdoor furniture manufacturer PolyFibre Pty (Ltd), has received SABS approval for its products, which EASTERN CAPE BUSINESS 2017 54
OVERVIEW means the company can move to commercialisation. PolyFibre uses recycled plastic and pineapple waste. The Small Enterprise Development Agency (Seda) is an agency of the national Department of Trade and Industry, and gives non-financial support to entrepreneurs through training, assistance with filling in forms, marketing and creating business plans. It often helps small businesses draft applications for loan finance. Seda’s main provincial office is East London, with nine other offices located throughout the province. Several of Seda’s technology incubators are in the Eastern Cape. Port Elizabeth is the head office of the Chemin incubator which supports SMMEs in the downstream chemical sector. Furntech (a furniture incubator) has a branch in Mthatha and there are also construction incubators in Mthatha and Port Elizabeth. The Seda Nelson Mandela Bay ICT Incubator (SNII) promotes entrepreneurship in the ICT sector. It also supports several small companies in sub-sectors ranging from hardware and software to graphics and web and systems analysis. In 2016, a new technology research and development centre (R&D Lab) was launched at its Newton Park technology office in Port Elizabeth. The facility offers assistance and support to design and develop apps, software solutions, as well as electronic and mechanical device prototypes. The Masisizane Fund offers loan financing at good rates and training through its Business Accelerator programme. As a non-profit initiative of the Old Mutual Group, the fund focusses on the cash flow of potential businesses rather than insisting on security in the form of property or something similar. In 2016, Absa Bank launched a new Enterprise Development Centre, the eighth of its kind in South Africa. The centre aims to give small businesses access to finance and to help entrepreneurs find markets. As part of its Small Contractor Development, Training and Community Participation programme, the South African National Roads Agency (SANRAL) offered training in 2016 to 20 people from four SMME sub-contractors in the making of dolosse. Dolosse are the large inter-locking blocks of concrete used to protect the N2 and railway line from the sea. Eight of the 2.5-ton dolosse are manufactured every day. The project’s main concrete subcontractor is Dynaform. The National Empowerment Fund (NEF) provides financial support from R250 000 up to R75-million for start-ups, the expansion of existing business, as well as the acquisition of equity. In the Eastern Cape, the NEF is supporting companies working in the fields of solar energy, restaurant franchises and transport. The Nelson Mandela Bay Business Chamber has a section devoted to SME support on its website and offers mentorship to start-ups and entrepreneurs. The Border-Kei Chamber of Business is similarly supportive. The Eastern Cape Exporters’ Club honoured two SMEs in 2016: Mend-A-Bath International (whose headquarters are in Port Elizabeth) won a merit award for entrepreneurial flair and Hansens Engineering won for increasing turnover and profitability in the medium enterprise category. All businesses are expected to register with the Department of Labour and contribute towards the Unemployment Insurance Fund. ONLINE RESOURCES Business Partners: www.businesspartners.co.za Department of Trade and Industry: www.dti.co.za Development Bank of Southern Africa: www.dbsa.org Eastern Cape Rural Development Agency: www.ecrda.co.za Eastern Cape Development Corporation: www.ecdc.co.za Industrial Development Corporation: www.idc.co.za Unemployment Insurance Fund: www.labour.gov.za National Empowerment Fund: www.nefcorp.co.za South African Institute of Entrepreneurship: www.entrepreneurship.co.za Small Enterprise Development Agency: www.seda.co.za Small Enterprise Finance Agency: www.sefa.org.za 55 EASTERN CAPE BUSINESS 2017
EASTERN CAPE BUSINESS THE GUIDE TO
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