“We are here to announce the progress we have made towards the goal of improved access to finance, including initiatives to make SMMEs finance more accessible and affordable,” said Ntshaveni
Ntshaveni emphasised that Sefa and Seda will ensure that SMMEs are provided with financial and non-financial support to succeed in their business initiatives and create much-needed jobs.
“We are committed that SMMEs must have access to strategic resources such as skills, knowledge networks, finance, and access to facilities/platforms among others, that will enable then to nurture their innovative ideas.”
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The department will ensure that Sefa and Seda services are brought closer to SMMEs through partnerships with incubation centres and local economic development offices in district and metropolitan municipalities.
“We have decided to avail Sefa and Seda services in all our incubators and municipal offices through LED units, supported by the regional offices of the two agencies. Engagement with SALGA is ongoing in municipalities for national roll-out programme where the president launched District Development Model, training will be provided to LED officials in districts and metros,” added Ntshaveni
Together with sister Development Finance Institution (DFIs) of government, the Department of Small Business will ensure seamless application funding wherein a common application will be adopted across all the DFIs.
“We committed ourselves to adopt business templates that are currently used by the National Empowerment Fund (NEF) as we coordinate the development of common templates with IDC, Land Bank, and NEF,” said Ntshaveni.
Ntshaveni added that the adoption of common templates for funding applications by DFIs will improve access to funding and lessen the burden of doing business by SMMEs and will improve the turn-around time in the approval of funding application
The department seeks to improve Sefa’s turn-around time to communicate funding decisions to ensure SMMEs know sooner than later on the decision to fund or not to fund its business initiative.
“We are committing Sefa to a turn-around time of 20 days on bridging finance and 30 days on term loans from the date of submitting a complete application, to communicating funding or non-funding decision to the applicant,” said Ntshaveni
Furthermore, when applying for funding from Sefa, the SMMEs will no longer be required to have 10 per cent to 15 percent upfront cash or collateral to obtain financial support from SEFA but needs you to be hands-on in your business operations.
“Another major impediment to acquiring funding by SMMEs is the requirement to provide unencumbered funds that range from 10-15 per cent of the funds applied for. Sefa does not have a requirement for unencumbered funds but requires operation involvement of the owners in the business
Sefa is a government-development finance institution that seeks to ensure that access to finance, development, and sustainability of SMMEs and co-operatives to contribute to the economy by creating much-needed job opportunities. Therefore, brings about inclusive economic participation and equality.
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While on the other hand, Seda is an agency of the Department of Small Business Development that seeks to ensure small businesses are an integral part of the economic growth of the country. Seda provides non-financial support and enterprise development through its national network. The support and development work includes the provision of business information, advice, coaching and training to SMMEs.
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