Transcript eThekwini SMME Strategy - eThekwini Municipality

BUSINESS SUPPORT &
MARKETS UNIT
Presentation to SMME
CONFERENCESEPTEMBER 2010
Mr Philip Sithole
Presentation Outline
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Purpose
Structure
Informal Economy
Markets
SMME Development Programmes
Conclusion
Economics Significance of SMMEs
in SA
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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.
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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.
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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
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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 incomegenerating 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
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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
Women
Empowerment
to Skills
Construction
Support to
Enterprises
• 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
• An important growth sector the Municipality
• Contractors trained in Bricklaying, Roofing, Plumbing and Painting
• Partnerships secured with Plascon, Corobrik and Builders Warehouse
• 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
SMME Fair
• 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 Fairs 12th 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
• Assistance with Export Readiness to SMMEs is provided by Trade Point Durban
Sister City
Relationships
Access to Markets
SMME PROGRAMMES
Access
to Finance
• 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
Finance Strategy
• 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
Partnerships with further financial institutions such as Nedbank and Standard Bank.
Financial
Institutions
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
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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
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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
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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!!
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Thank you!!