Limpopo Business 2017-18 edition

OVERVIEW Development

OVERVIEW Development finance and SMME support A new strategy for the economies of townships and villages will boost SMMEs. SECTOR INSIGHT Shanduka Black Umbrellas has 20 client businesses in Lephalale. • A co-operative is to be established to do bulk buying for SMEs and co-operatives. A concerted strategy to strengthen and develop the economies of the townships and villages of Limpopo has been launched. Spearheaded by the Limpopo Economic Development Agency (LEDA), a unit of the Limpopo Department of Economic Development, Environment and Tourism (LEDET), the plan has eight focus areas which include making licences and permits easier to obtain, that government departments buy from small, medium and micro-enterprises (SMMEs), indigenous products are supported and protected, and encouraging small businesses to support one another through the clustering approach. LEDET has signed memorandums of understanding with the South African Bureau of Standards (SABS) and with Productivity South Africa. These agreements aim to help SMMEs within the province become more competitive. Gaining access to markets is crucial for SMMEs and the programme aims to assist in that regard. Ten SMMEs and 10 co-operatives are currently being assisted in getting access to the mainstream market. Agricultural entrepreneurs will benefit from the Agri-park scheme. A series of meetings around the province began in June 2017, organised by LEDET. The aim was to hear from owners of small businesses such as plumbers, panel-beaters, mini-bus taxis, street vendors and taverns. Among the problems identified are: • financial products that do not address the needs of entrepreneurs • dominance of ownership by foreign entrepreneurs • retail shopping malls crowding out local traders • lack of bargaining power of smaller retailers. LEDA is to establish a bulkbuying co-operative. The plan is to enlist more than 200 members whose collective buying power will give them an advantage in purchasing stock. An infrastructure project that will assist SMMEs and co-operatives is under way near Polokwane at the Seshego Industrial Park. The National Department of Trade and Industry has committed R21-million to revitalising the park which will provide trading and storage space for businesses of all sizes. The construction by the provincial government of market stalls is aimed at supporting small-scale farmers and traders. Market stalls have been erected at Mopani District and will be put up in Elias Motsoaledi Local LIMPOPO BUSINESS 2017/18 80

OVERVIEW Municipality in the Sekhukhune District and Molemole Local Municipality in the Capricorn District. The National Department of Small Business Development (DSBD) has several programmes to assist SMMEs and co-operatives. These include: • The Black Business Supplier Development Programme, a cost-sharing grant to promote competitiveness • The Co-operative Incentive Scheme, a 100% grant. The Small Enterprise Development Agency (Seda) is a subsidiary of the DSDB and is one of the most active agencies in supporting entrepreneurs. Seda is not a financial agency, focussing rather on training and administrative support, although the agency will help SMMEs get in touch with financial bodies. The Seda Limpopo Jewellery Incubator (SLJI) develops entrepreneurship among jewellers in Limpopo. In the south-east of the province the Biofuels Incubator promotes skills in that important sector. Seda has initiated a national programme designed to make co-operatives and jointly owned enterprises stronger. As part of the Cooperatives and Community Public Private Partnership (CPPP) programme, Seda is supporting a project in Tarentaal. The National Gazelles is a national SMME accelerator jointly funded by Seda and the DSBD. The aim is to identify and support SMEs with growth potential across priority sectors aligned with the National Development Plan and Seda’s SMME strategy. Businesses can receive up to R1-million for training, productivity advice, business skills development and the purchase of equipment. The Industrial Development Corporation (IDC) disburses about R400- million annually in Limpopo. Projects include an Nguni cattle breeding scheme, a new hospital in Lebowakgomo, the development of a ferrochrome smelter and a facility for making coking coal briquettes. The Development Bank of Southern Africa (DBSA) is another major funder of public projects. Private sector One of the best ways of supporting SMMEs in Limpopo is through the supply chain for the province’s mines. The provincial Premier has challenged mines to achieve a 20% SMME procurement target. A private initiative that has used the supply chain to create employment is Anglo American’s Zimele, which has established 29 small business hubs in areas such as Mokopane and Burgersfort. More than 20 small businesses are registered as clients with the Shanduka Black Umbrella incubator in Lephalale. The sectors in which these companies operate range from plant hire and construction to training and marketing. Individual mentors for these enterprises are drawn from the local TVET college, the Limpopo Economic Development Agency and private businesses. The major banks all have SMME offerings. Standard Bank runs a Community Investment Fund and Nedbank offers an enterprise development product for businesses with turnovers up to R35-million. Agri-business and agri-processing are among the three sectors that are targeted by the Masisizane Fund for loan financing. The others are franchising/commercial and supply chain/manufacturing. Over and above loans that are available, training is offered through a Business Accelerator Programme. ONLINE RESOURCES Development Bank of Southern Africa: www.dbsa.org Gazelles: www.nationalgazelles.org.za Industrial Development Corporation: www.idc.co.za Limpopo Department of Economic Development, Environment and Tourism: www.ledet.gov.za National Department of Small Business Development: www.dsbd.gov.za Shanduka Black Umbrellas: www.shandukablackumbrellas.org Small Enterprise Development Agency: www.seda.org.za Small Enterprise Finance Agency: www.sefa.co.za 81 LIMPOPO BUSINESS 2017/18