The Department of Small Business Development and The Small Enterprise Finance Agency (sefa) refute allegations made by DA spokesperson on Small Business Development, Jan de Villiers. De Villiers said recently that the entities had used only eight percent of their Covid-19 relief funds.
These are the substantive facts:
- A total of R572 million (against a budgeted R733.6-million) has been approved by sefa for Covid-19 relief response. This amounts to 78 percent of funds; not eight percent as claimed by De Villiers
- R316 million of the allocated R513 million to fund SMMEs has been disbursed
- An additional R10 million has been disbursed towards business growth and resilience facilities
- R105 million has been approved for SMME payment holidays
Sefa is committed to fuelling economic growth and job creation in South Africa by offering accessible, affordable development finance in the form of loan and credit facilities, as well as loan guarantees, to SMMEs and co-operative enterprises.
The Department of Small Business Development, through sefa, has introduced various SME [small and medium enterprise] and informal and micro-enterprise programmes to the value of R1.23 billion for economic recovery and R733.6 million for Covid-19 response. These programmes comprise debt relief, credit guarantees and other instruments that address funding constraints
“The single biggest challenge we face is that a large number of of businesses that apply for funding do not meet the funding requirements,” says sefa CEO Mr Mxolisi Matshamba. “Most of the applications are rejected because critical supporting documents have not been included in their applications,” Matshamba adds.
The funding criteria is listed below
- Businesses which are negatively affected due to the Coronavirus pandemic
- Company must be 100% owned by South African citizens
- Employees must be 70% South Africans
- Priority will be given to businesses owned by Women, Youth and People with Disabilities
- Be registered and compliant with SARS
- Be UIF compliant
- Be registered on the National SMME Database – www.smmesa.gov.za
Sefa is in the process of automating the funding application process. This will improve the application process ensuring all the supporting documents are included and will enable a large number of businesses to access sefa’s offerings remotely.
With the economy opening up and some SMMEs and cooperatives gradually going back to business, sefa will be implementing the Township and Rural Entrepreneurship Programme (TREP) in collaboration with SEDA (Small Enterprise Development Agency). The Minister for Small Business Development, Ms Khumbudzo Ntshavheni announced the second-wave of support for informal, micro and small enterprises including cooperatives based in townships and villages, in addition to the Spaza Support Scheme. The dedicated support programmes for township and village-based enterprises are in line with the Department’s Township and Rural Entrepreneurship Programme (TREP) that was approved by Cabinet.
Sefa offers finance to qualifying businesses in a range of sectors, including but not limited to services ( retail, wholesale and tourism); manufacturing (agro-processing); agriculture (specifically land reform beneficiaries and contract-farming activities); construction and green industries (water, energy and waste).