KwaZulu-Natal Business 2016-17 edition

OVERVIEW
get work from government to the
value of R33.9-million. The agency
served more than 10 000 enterprises
in the same period, most
of which increased their turnover
and employment numbers. The
incubation programme worked
with 1 587 businesses and created
nearly 3 000 jobs.
Research by Absa shows that
SMMEs were supporting 60% of
the country’s employable population
in 2011, against a figure of just
18% in 1998. The 2012 Absa SME
Index noted that of the country's
700 000 businesses, only 270 000
employ more than five staff members.
The average number of people
employed is 11.
Larger projects
The KZN Growth Fund will end
its mandate in August 2016: this
project-finance debt fund of
R787.5-million was underwritten
by the Development Bank of
South Africa, Standard Bank and
the KZN Department of Economic
Development, Tourism and
Environmental Affairs.
In funding large private projects,
the expectation was (and
is) that smaller suppliers down
the value chain will also benefit.
Among the Growth Fund's most
recent projects to be funded are:
• SA Shipyards expansion,
R42.8-million (150 jobs)
• Dark Fibre Africa telecoms cabling
installation, R193-million
(4 201 jobs)
• Link Africa telecoms, R65-
million (500 jobs)
• Mpact plant expansion,
R200-million (1 760 jobs).
National government has created a new agency to spur the development
of SMMEs, the Small Enterprise Finance Agency (Sefa),
which falls under the Industrial Development Corporation, one of the
biggest and most significant agencies in economic development in
the country.
The IDC provides finance across a range of sectors from agriculture
to tourism. It has holdings in several companies with a presence in
KwaZulu-Natal: 42.6% in Hans Merensky (Pty) Ltd, a plantation and
timber mill operator; 100% in Prilla 2000, a cotton-milling operation;
and 85% in Foskor, which has a phosphoric acid plant in Richards Bay.
The IDC also funds local development agencies such as the Hibiscus
Coast Development Agency.
The IDC will spend R102-billion to 2016, of which R22.4-billion has
been set aside for 'green economy' initiatives and a total of R20.8-billion
for manufacturing support.
All of the major banks have SMME offerings. Absa Bank’s SME Fund
is driven by its Small Business Division and the Enterprise Development
unit. Absa's SME fund is available to fund projects from R5 000 to
R3-million, and it can be given to start-ups or existing businesses.
The target market is black-owned businesses which don't have access
to normal lending or banking channels. The Absa Development
Credit Fund, a partnership with the United States Development Credit
Authority, is another avenue for entrepreneurs.
Standard Bank’s Community Investment Fund (CIF) initiative
extends loans to informal businesses. The CIF has distributed more
than R7-million to more than 630 businesses through its six funds in
three provinces.
Nedbank has an enterprise-development product that supports
businesses with a turnover up to R35-million with at least 25%
black ownership.
ONLINE RESOURCES
Business Partners: www.businesspartners.co.za
Development Bank of Southern Africa: www.dbsa.org
Industrial Development Corporation: www.idc.co.za
Ithala Development Finance Corporation: www.ithala.co.za
KZN Growth Fund: www.kzngrowthfund.co.za
KwaZulu-Natal Department of Economic Development and
Tourism: www.kznded.gov.za
National Department of Trade and Industry: www.dti.co.za
National Empowerment Fund: www.nefcorp.co.za
Small Enterprise Development Agency: www.seda.co.za
Small Enterprise Finance Agency: www.sefa.org.za
South African Institute of Entrepreneurship:
www.entrepreneurship.co.za
103 KWAZULU-NATAL BUSINESS 2016/17