Transcript SMME Conference - Africagrowth Institute

23 October 2008
Cape Town
Presenter: Mrs Wawa Damane
Lessons from three developing countries
Contents
The role of government in small enterprise
development
2. Comparative perspectives of 3 countries
1.
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Brazil
India
South Africa
3. Key lessons
4. Conclusion
The Role of Government
 Two schools of thought
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Minimum involvement of government in service delivery
Greater involvement of government in service delivery
 Creating an enabling environment
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Policies must be clear and unambiguous
Implementing institutions well resourced
Enabling regulatory environment
Efficient and reliable administration
Case Study: Brazil
 Small businesses comprise 98% of all enterprises
 The population is ±170 million people
 Number of small enterprises is 4.5million which,
contribute 21% of GDP (US$ 7billion)
 Recently developed a comprehensive legislation for
small businesses
 Key Institutions: Sebrae; CACB
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Business development services
Innovation and technology promotion
Finance-Risk capital and micro finance
Incubation
Case Study: India
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Population is over 1 billion people
Has a ministry for small scale industries
Small businesses comprise ± 90% of all enterprises
Recently did a comprehensive review of legislation for
small businesses
 Key Institutions: National Small Industries
Corporation, SIDBI, CII
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Financing
Industrial extension services
Technology support
Technical Training
Case Study: South Africa
 Small businesses comprise 95% of all enterprises
 The population is ± 44 million people
 Number of small enterprises is ± 2.8 million
 Current legislation developed in 1996 with some
amendments in 2001 and 2004
 Key institutions
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SEDA (Business development services)
KHULA (Finance)
SAMAF (Micro Finance)
IDC (Financing)
Provincial development corporations
Key Lessons
 Clarity of vision and policy supported by good planning
and administration is essential for success
 A champion for government is needed to drive the vision
 Partnership between government and small business
associations provide more sustainable interventions e.g.
400 industrial clusters in India, 2570 focus groups in Brazil
comprising of 33000 SMMES, Mozambique 16 and South
Africa 26 focus groups
 Funding models for institutions should provide for long
term intervention with sustainability as a goal e.g. 0,3% of
pay roll contribution by SMMES is used to fund SEBRAE in
Brazil
Conclusion
 Countries where government has wisely
intervened have shown results over time
 Emerging examples of public private partnerships
enable government to reach more SMMEs in a cost
effective manner.