Date: 01 December 2020

The Portfolio Committee on Small Business Development met virtually (25 November 2020) to be briefed by the Department of Small Business Development (DSBD) on its 2019/20 Annual Report, as well as that of the Small Enterprise Development Agency (SEDA) and Small Enterprise Finance Agency (SEFA).

The Department of Small Business Development had set out to achieve 27 annual performance indicators and targets over the reporting period; 18 (or 67%) of the targets were achieved and nine (33%) were not achieved. The Department had a 1.8% expenditure variance on the annual budget – expenditure of R2.229bn out of the allocated R2.269bn, which translates to a variance of R39.8m. Additionally, the Department achieved a 55.9% representation of women in its senior management services, above the public service standard of 50%. The Department also has 2.4% persons with disabilities as of 31 March 2020. However, the Department’s vacancy rate steadily increased and ended the reporting period with 26 vacancies, which translate into a vacancy rate of 12.4%. The Department received an unqualified audit outcome with material findings on performance information and compliance with legislation.

SEFA reported that it has been appointed as the implementing agency for the R2.7bn Small Business and Innovation Fund commencing in FY2019/20. Achievements for the year under review included approvals standing at R570m; disbursements at R588m; 474 SMMEs financed; and 7 849 jobs facilitated. The Agency’s highlights of its financial performance as of 31 March 2020 included receiving an unqualified clean audit opinion since its inception on 1 April 2012. The Agency also maintained costs and achieved cost-to-income ratio of 79% against a budget of 83%. The total loan book portfolio was R1.9bn as of 31 March 2020 and is comprised of R1.2bn wholesale lending book and R645 million in respect of direct lending book.

SEDA’s performance information is structured in line with its approved annual performance plan for 2019/20. In the year under review, the Agency measured its performance on 32 targeted indicators at the output level. The organisation achieved and exceeded the set targets on 28 indicators and did not achieve the set performance on four indicators. This performance reflects the achievement of 88% on set indicators.

In the 2020/21 financial year, the organisation is focusing on offering support to spaza shops, automotive, artisans, hairdressers, tshisanyamas, fruit and veg vendors as well as clothing and textile; build a strong South African Incubation and accelerator entrepreneurship ecosystem, focusing on townships and rural areas – including rolling out incubators in these areas.

Note: The complete text of the minutes can be accessed here.