SME DEVELOPMENT
We have recently consulted with the Minister
for Planning in the Presidency and the National
Planning Commission. We are exploring a number
of initiatives to support the NDP, one of which is
SME development.
access to finance,’ says Muzi Mhlambi, Manager: Programmes
for Socio-Economic Growth and Development Division at The
Banking Association.
While billions of rands have been funneled to SMEs, Mhlambi
says there are some hurdles that stall their financing.
He cites a study done by his organisation and
USAID’S Financial Sector Programme which
showed that at the lower end, SMEs require
‘ancillary support before they can become
candidates for funding’.
One of the challenges mentioned in the
study was that entrepreneurs found it difficult
to keep accurate and up-to-date financial
records, especially financial statements. Other
contributing factors cited were poor sales
pitches by entrepreneurs and lack of proper
knowledge of the sectors that the entrepreneurs
venture into.
Mhlambi also points to a generally poor entrepreneurial
culture in South Africa, regulatory and policy issues, lack of
equity funding to SMEs, and the fact that there is no structure in
government which is purely focused on looking after SMEs.
He further adds that uncertainty and a lack of commitment to the
vision of the NDP poses a challenge.There is also an attitude that
seems to think the NDP is somthing that must happen in the future
whereas implementation needs to start now if its objectives are to
be fulfilled.
On the issue of dealing with regulatory barriers and lowering
the cost of doing business, the Plan proposes a series of interventions, including the appointment of an expert panel to prepare
a comprehensive regulatory review on SMEs. The review will
look into business registration, tax, labour laws and local government matters.
Although there are challenges, The Banki