Johannesburg – The Department of Small Business Development has set itself a target of growing small business contribution to gross domestic product (GDP) from 35% to 50% by 2024.
This information is contained in the department’s 2021/22 annual performance plan.
To achieve this target, among others, the department plans to facilitate the increase in small businesses in historically concentrated economic sectors, that is, township economies and rural development.
The department also plans to work with key institutions such as the Department of Trade and Industry and the Competition Commission to open entry for SMMEs and cooperatives in historically concentrated economic sectors.
Small Business Development Minister Khumbudzo Ntshavheni said one of the priorities is to finalise and implement the SMMEs and cooperatives funding policy to improve access to finance and coordinate financial investment of the public and private sector.
“Development finance institutions and the private sector continue to invest enormous financial resources to support the development of vibrant and sustainable SMMEs. Despite these efforts, access to finance by SMMEs and cooperatives remains a major challenge … The situation is worsened by the absence of the SMME funding policy,” she said.
The World Bank said in a report last year that informal businesses, which account for the majority of SMMEs in the country, have limited access to the funds.
It estimated that there is a $30-billion (R451-billion) gap between supply and demand for small businesses.
Ntshavheni also said engagements with captains of industries and business associations will be undertaken to assess the effect and impact of legislation inhibiting the growth and sustainability of SMMEs and cooperatives’ key priority sectors such as agro-processing, gas and chemicals, tourism, automotive, steel, ICT and software, as well as creative industries.
The department has been allocated R4-billion over the medium term for township and rural enterprises, including blended finance initiatives.
The funding will support the implementation of the township and rural entrepreneurship programme to assist the growth and participation of township and rural enterprises in the mainstream economy.
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