DSBD, SEDA and SEFA 2020/21 Special Adjustments Budget presentations

The Small Business Development potfolio committee met on 15 July 2020 to receive the revised performance and budget plans from the Department of Small Business Development (DSBD), the Small Enterprise Development Agency (SEDA), and Small Enterprise Finance Agency (SEFA). The Department and its entities explained where their targets had been reprioritised and budgets reallocated to mitigate the impact of the Covid-19 pandemic on their operations.

SEDA said its aim was to strengthen clients through their collaboration with the Small Enterprise Finance Agency (SEFA). It would be utilising broad-based black economic empowerment (BBBEE) accreditation to leverage private sector enterprise development funding. In response to the external environment and the challenges posed by COVID-19, it had also aligned with the expectations and programmes that were mandated by the DSBD. The impact of digital technology on SEDA’s operations and delivery strategy could not be under-estimated. It was exploring how digital technology could improve and transform various aspects of its operations, from e-learning for practitioners to client on-boarding, referrals, communication and promotion, and the marketing of the small businesses and their products or services.

SEFA said that to mitigate the impact of COVID-19 on small, medium and micro enterprises and co-operatives, SEFA and SEDA would implement programmes to the value of R733.6 million through the SMME Relief Fund, the Business Growth/Resilience Facility, and a payment holiday for SEFA-funded clients. It would also roll out interventions amounting to R1.23 billion to stimulate rural and township entrepreneurship.

After the DSBD had indicated where it had had to make budget cuts and reduce targets, the Minister said that the presence of Covid-19 had fast-tracked the Department’s ability to introduce technology as a means to support small businesses. The ministry used the small business database so that small businesses could apply online. They had also extended the footprint of SEDA, which was embedded in the country’s district municipalities to ensure that in those areas where they did not have the technology, people could still apply.

The major issue of concern to the Members was the impact of Covid-19 on transformation targets. Other aspects of the entities’ operations which came under scrutiny were challenges involving interest rates and access to their facilities. It was also asserted that many small enterprises were excluded from the mainstream economy because of the mandatory licence fees which they could not afford.

Note:  The complete Portfolio Committee meeting report can be accessed here

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