Date: 8 December 2021

The Small Business Development Committee met with the Department of Small Business Development and its agencies, to receive briefings on the implementation of the Business Recovery Support Package (BRP) and on the progress of the proposed merger between the Small Enterprise Development Agency (SEDA), the Small Enterprise Finance Agency (SEFA) and the Cooperative Banks Development Agency (CBDA). The meeting took place on 8 December 2021.

SEFA told the Committee that it had received a total of 785 applications for the BRP. Of these 447 were incomplete, 192 had passed the initial screening and 75 did not qualify for the support package. A total amount of R172 632 078 had been disbursed to successful applicants in Gauteng and KwaZulu-Natal. Of the small enterprises that received financial support from the programme, 36% were owned by females. The scheme had budgeted to support 13 333 informal traders with a once-off grant of R3 000 each, but had received only 7 410 applications to date and disbursed R10.07 million to 3 356 informal traders.

Committee members asked if the Department could submit evidence of the monies that had been disbursed, as some businesses had reported to the Committee that they had applied for funding but had not received the monies. They noted that the President had requested that the applicants who had no permits be given free permits by their municipalities so that they could receive the necessary assistance from SEFA. They asked if the applicants were able to receive those permits.

The Department briefed the Committee on progress in merging SEDA, SEFA and the CBDA. The Committee was told that, in 2021, the Cabinet approved the consolidation of the agencies reporting to the Minister of Small Business Development, to form a new entity that would be responsible for the provision of both financial and non-financial support to small enterprises throughout the entire business development lifecycle. On 4 August 2021, the Cabinet approved the proposal that SEDA should acquire SEFA and the CBDA to enable integrated government support to small enterprises with effect from 1 April 2022. The process of appointing the Board of Directors for the merged entity had been initiated, and the advertisement would appear in newspapers on 12 December 2021.

The Committee asked to what extent the Department had engaged with the unions about the merger. How was the merger going to address the issue of fragmentation and poor coordination of SMMEs at local and provincial levels? What were the expected financial implications of appointing an independent contractor to oversee the implementation of the merger? Was it practically possible for the merger to be completed before the next financial year?

Note: The presentations to the committee and the complete meeting summary can be accessed from the PMG website, here