BUSINESS SUPPORT & MARKETS UNIT

Presentation to SMME CONFERENCE SEPTEMBER 2010 Mr Philip Sithole

Presentation Outline

 Purpose  Structure  Informal Economy  Markets  SMME Development Programmes  Conclusion

Economics Significance of SMMEs in SA

 Of a total of 906 700 firms operating in South Africa, large enterprises constitute only 6 000 in number, or 0,7 per cent of the total.

 The remainder is made up of SMEs, including survivalist and micro enterprises. Of course, in terms of value added (income generation or GDP), the large firms contribute disproportionately to their numerical share. This, however, should in no way distract from the organic linkages between SMEs and large firms. All large enterprises rely heavily on SMEs' performance for supply and demand reasons.

   Unemployment in African cities is the highest in the world, averaging around 24%.

Up to 54% of all employment is in the informal sector.

This presents major challenges to urban policy and management, and in particular the need to ensure a highly efficient support environment

Business Support & Markets Unit’s Purpose

 To provide integrated business support services to existing and potential businesses in the eThekwini Municipal Area to enable them to undertake income generating activities resulting in job creation and economic growth  To improve the management and development of the Informal Economy and Markets within the Ethekwini Municipal Area

STRUCTURE

Informal Economy SMME Development Markets

INFORMAL ECONOMY

 Provide a management service in accordance with Council and  National Legislation Identify new and existing areas for management

Successes

Reduced the number of Illegal traders and increased the amount of rentals paid since 2006.

Established new organisations such as Ethekwini Municipality Informal Economy Forum (EMIEF) and South African National Informal Economy Forum (SANIEF)

Informal Economy

MARKETS

 Responsible for the Management of the Bulk Market located in Flower Road  Management of Retail markets and Flea Markets throughout the EMA  Reviewing the demographic profile of traders and Agents to ensure representivity

SMME PROGRAMMES

Access to Skills Women Empowerment •Capacity building programme with a focus on Women In Business •Purpose is to break down barriers in accessing information, finance and markets •420 women participated to date •Conducted in partnership with ABSA, Deloitte, SAIBL and Productivity South Africa Construction •An important growth sector the Municipality •Contractors trained in Bricklaying, Roofing, Plumbing and Painting •Partnerships secured with Plascon, Corobrik and Builders Warehouse Support to Enterprises •Provides capacity building to SMMEs in entrepreneurship, leadership, financial management, events management etc •Over a 5000 SMMEs and Informal traders have been capacitated since its inception.

Access to Skills

SMME PROGRAMMES

Access to Markets Business Linkages • The purpose of the business linkages program is to bring together small and big business and provide a platform for them to do business. This means that government, parastatals and big business need to provide a list of business opportunities for the small business who will be profiled and matched with those opportunities.

• SAPREF, MONDI, KZN Oils have all participated in our Business Linkages programme • Partnership with SAIBL for the purposes of improving the capacity of SMME to benefit from Business Linkages SMME Fair • SMME Fairs 12 th year of operation. In the last 6 years the Fair has grown tremendously in stature and the number of businesses who benefit • Appears to be the largest such Event of its kind in South Africa • In the last 3 years have attracted international interest • Interest from the Private sector has increased significantly since its inception • Through the Sister City relationships , Business Support has made it possible for SMMEs to access international markets and have participated in a number of International Exhibitions and trade delegations • Cities in partnership with Ethekwini Municipality includes Le Port, Bremen, Guangzhou, ,Milan, Leeds, Chicago, New Orleans, Kigali, Rwanda, Accra, Ghana, etc Sister City Relationships

Access to Markets

SMME PROGRAMMES

Access to Finance Finance Strategy • Often identified as a major challenge to SMMEs. Undertook the strategy to understand the extent of this challenge and seek strategic, practical solutions to overcome this challenge Partnerships with Financial Institutions • In order to address these challenges, partnerships with financial institutions is necessary • An Expression of Interest was advertised, a number of financial institutions have risen to the challenge including ABSA and FNB. We are in the process of negotiating such partnerships with further financial institutions such as Nedbank and Standard Bank.

Financial Education • Whilst accessing loans is considered to be a major challenge by SMMEs, the Unit recognised that the inability to understand and manage finance is a significant problem to SMMEs • Financial Education programmes have become a key feature of the Unit • Partnerships with ABSA, FNB and more recently Old Mutual is assisting in addressing this challenge • Business Plans training also forms a key feature of educational programmes

Access to Finance

Strategic Partnerships

   Government resources are limited, therefore the Unit initiated a project to form partnerships to increase the level of coordination, increase the pool of resources available and to increase the value of the service offering to SMMEs A number of partnerships have been initiated with International organisations, the Private sector and other government departments as well as tertiary institutions We appealing to other companies, organisations and institutions to come forward to forge partnerships with the Unit as part of their Corporate Social Investment Programmes or to increase your performance on BBBEE scorecards and ratings .

Current Strategic Partnerships

Conclusion

 Business Support & Markets Unit makes a significant contribution towards alleviating many of government challenges and contributing to national economic and social objectives such as   Skill Development Job creation and economic growth   Poverty alleviation Human Resources development   SMMEs are finding themselves in a new and rapidly globalising context and in order to take advantage of this trend, instead of being engulfed by it, a brand new class of SMMEs must be fostered. Therefore “a world class support environment is needed!” Achieving a world class support environment requires hard work and, private sector and political commitment!!

Thank you!!