Date: 09 March 2021

DSBD, sefa, seda: 2020/21 Quarter 2 performance, July-September 2020

In a virtual meeting (03 March 2021), the Department of Small Business Development (DSBD), the Small Enterprise Development Agency (SEDA), and the Small Enterprise Finance Agency (SEFA) reported on their second quarter performance during the 2020-2021 financial year.

The DSBD had met 17 of 19 its quarterly targets, which was an improvement on previous quarters. A draft had been produced of the small, medium and micro enterprises (SMMEs)-focused localisation policy framework and implementation programme, and the development of a draft SMMEs and cooperatives funding policy had commenced. Progress had been made in consultations on the national integrated small enterprise development masterplan, the creative industries masterplan, the SMME database, and other departmental programmes. The Department had supported cooperatives to the value of R13 million.

SEDA had underperformed on most quarterly indicators. It had assisted only 48 SMMEs with access to finance and 8 779 with business development support, which was well below its targets. The underperformance was primarily caused by the low uptake as a result of COVID-19 and the national lockdown. It had underspent its budget by 30% for the same reason.

SEFA had also underperformed on most quarterly indicators. Uptake in SEFA loans had been lower than projected, and development indicators had fallen as a result. At the end of the quarter, the amortised total SEFA loan book stood at R2.3 billion. Total loan book disbursements for the quarter had been R400 million — 67% of the target. Those disbursements had financed 5 584 SMMEs, mostly in the micro-enterprise sector, and facilitated 12 349 jobs. The national lockdown had hindered the achievement of disbursements targets, as economic activity had been low. This had had a knock-on effect on development indicators. The agency had performed well financially, meeting its targets for portfolio at risk, accumulated impairment provisions, and collections.

Members said the presentations did not reflect the pessimism and frustration they encountered among their constituents. The Chairperson commented that the Committee’s central concern was whether the entities’ funds were accessible to the public. Also of concern to Members were the ongoing labour disputes at SEDA, the need to make permanent executive appointments within the entities, and the entities’ institutional capacity, especially as it affected their ability to address the negative impacts of the COVID-19 pandemic.

Note: The full text of the meeting summary can be accessed via the PMG website, here.