Transcript Department of Small Business Development REVISED STRATEGIC

Department of Small Business Development
REVISED STRATEGIC PLAN 2015/16 – 2019/20
ANNUAL PERFORMANCE PLAN 2016/17
Select Committee
10 May 2016
Outline
 Strategic overview
 Legislative and other mandates
 Situational Analysis
 Strategic Goals and Objectives
 Programmes
 APP 2016/17
 Seda & Sefa
 Way forward
2
Mandate
The department will lead an integrated
approach to the promotion and development of
small businesses and cooperatives through a
focus on the economic and legislative drivers
that stimulate entrepreneurship to contribute to
radical economic transformation.
3
Mandate…
It is necessary to recognise the tension in the mandate and strategic focus between supporting
dynamic established SMMEs with growth-focussed efforts and poverty alleviation, which focuses
on the poorest of the poor.
Growth-focussed Support
Established SMMEs with scope to grow
Greater employment multiplier
Greater ROI and sustainability for
financing activities
Long-term higher impact on overall
mandate
Establishment of black industrialists
Eg Gazelles programme
Poverty Alleviation
- Focus on micro and informal enterprises
- Priority is sustainable livelihoods for the
poorest in society (incl rural areas and
priority groups – women, youth, people
with disabilities)
- Focuses resources on the areas of
greatest need
- Lower impact, lower employment
multiplier
While the breadth of the mandate means that DSBD does not have the luxury of focussing
purely on one or the other, a balance must be found that ultimately prioritises the highest
impact opportunities.
2015 | 4
1
Strategic Overview
Vision
Where we want to be
A radically transformed
economy through effective
development and increased
participation of SMMEs and
cooperatives in the
mainstream economy
Values
Mission
How we want to
behave
Why we are here
To create a conducive
environment for the
development and growth of
small businesses and
cooperatives through the
provision of enhanced
financial and non-financial
support services, and
leveraging on public and
private procurement
•
•
•
•
Integrity
Professionalism
Accessibility
Commitment
STRATEGIC GOALS
AND INITIATIVES
INDIVIDUAL
PERFORMANCE
ORGANISATIONAL
PERFORMANCE
What we are going to do
How we manage our
individual performance
How we manage
collective performance
5
Legislative and other mandates
Constitutional Mandate:
Section 22:
Every citizen has the right to choose their trade,
occupation or profession freely. The practice of
a trade, occupation or profession may be
regulated by law.
6
Legislative and other mandates
Policy mandates:
• The National Development Plan – Vision 2030 developed on
the basis that South Africa needs an economy that is more
inclusive, more dynamic and in which the fruits of growth are
shared more equitably
• The DSBD plays a major and direct role in implementing
Chapters 3 and 6 of the NDP that deal with the economy and
employment and rural inclusive growth, respectively.
• The NDP builds on the government’s New Growth Path that
aims to create 5 million jobs by 2020 and bring about a new
more inclusive, labour-intensive and efficient economy.
7
Legislative and other mandates…
Policy mandates (cont)
• Creating decent work, eliminating poverty and reducing
inequality can only happen through a new economic growth
path founded on restructuring the South African economy
• The Medium Term Strategic Framework (MTSF) 2014-19 is
the first 5-year implementation plan of the NDP
• The department is tasked to contribute to two outcomes of
the MTSF, namely, Outcome 4: Decent employment
through inclusive growth, and Outcome 7: Rural
development.
8
Legislative and other mandates…
Policy mandates (cont)
• During the 2014 and 2015 State of the Nation Addresses, the President
emphasised the role that small business can play in jump-starting the
economy and under the “small business is big business” theme, he
emphasised the need for the economy to prioritise support to small
businesses, cooperatives and informal businesses.
• In the 2015 State of the Nation Address, the President announced that
“Government will set-aside 30% of appropriate categories of State
procurement for purchasing from SMMEs, co-operatives as well as
township and rural enterprises”.
9
Legislative and other mandates…
Planned Policy Reviews
• Integrated Strategy on the Promotion of
Entrepreneurship and Small Enterprise
• National Small Business Act, 1996 as
amended
10
Situational analysis
THE GLOBAL PERSPECTIVE
• Globally, SMMEs are key drivers of growth and job creation in
better performing and more stable economies
• Small businesses represent over 95% of total businesses and
employ between 60% and 85% of the total work force in
countries such as Germany, India, Malaysia, the People’s
Republic of China and Taiwan
• The contribution and participation of small business in the
South African economy is far below its potential
• Currently, small businesses represent 98% of the businesses
and employ 47% of the total workforce
11
Situational analysis…
THE SOUTH AFRICAN PERSPECTIVE
• According to Colin Coleman, “South Africa can achieve 5% growth
over the next five years if Government and the Private sector
together invest R12bn in 300 000 new small businesses every year
in the next five years.”
• Realising this potential, the DSBD is embarking on a process of
mobilising all spheres of government and private sector to redefine
the policy, legislative and regulatory environment to capacitate
small businesses to turn the economy around
• Government has committed to provide greater opportunities for
SMMEs to access the public procurement system through
legislative reform, which includes the revision of the Small Business
Act and the Preferential Procurement Policy Framework Act
12
Situational analysis…
THE SOUTH AFRICAN PERSPECTIVE
• The 2015 Public Sector Supply Chain Review procurement
confirmed that in 2013/14 government spent R500 billion on the
procurement of goods and services as well as construction works
• If a portion of that money were to be directed to SMMEs, it would
make a significant contribution to the sustainability and growth of
SMMEs
• Through the Nine-point Plan, government has shown its
commitment to “unlock the potential of SMMEs, cooperatives,
township and rural enterprises” in an effort to ensure that the
goal of radical economic transformation is achieved
• The DSBD is at the forefront of leading and coordinating the
concerted effort to advance the development of small businesses
•
13
SWOT Analysis
STRENGTHS
WEAKNESSES
1.
2.
3.
4.
5.
6.
1.
2.
3.
4.
Stable leadership
Corporate governance
Financial management
Integrated Strategic planning (with entities)
Change management
Space for innovation
Financial constraints
Human resources constraints
Integrated planning with provinces
Small establishment, big mandate
THREATS
OPPORTUNITIES
1.
2.
3.
4.
5.
1. Supportive stakeholder network
2. Supportive national policies, plans (NDP,
NDGP, MTSF)
3. Counter-cyclical monetary & fiscal
macroeconomic policies
4. Established entities
5. High demand for products and services
from SMME/Cooperatives
Economic slow down
Rising fiscal debt burden – debt service 9.9%
Limited private sector investment
Unemployment: 25%
Rising Inflation, Interest rates
14
Strategic outcome orientated goals
STRATEGIC
GOAL
GOAL STATEMENT
1. AN EFFECTIVE AND EFFICIENT ADMINISTRATION
To create a stable public service organisation as reflected by efficient service delivery,
policy implementation, sound governance and systems and processes to ensure the
effective utilisation and leveraging of resources.
STRATEGIC
GOAL
2.
AN ENABLING ENVIRONMENT FOR COMPETITIVE SMALL BUSINESSES AND
COOPERATIVES
GOAL STATEMENT
To promote integrated planning and the review of existing legislation and policies to
create a simplified environment for the development and promotion of small
businesses.
STRATEGIC
GOAL
3.
SUSTAINABLE SMALL BUSINESSES AND COOPERATIVES IN RURAL &
TOWNSHIP COMMUNITIES.
GOAL STATEMENT
To provide business support services to small businesses and cooperatives in
township and rural areas in particular, to stimulate jobs and wealth creation.
15
Strategic goals, objectives & budget
Strategic Goal 1:
Strategic Goal 2:
Strategic Goal 3:
Strategic Objectives (R118 mil –
9%)
Strategic Objectives (R26.1 mil –
2%)
Strategic Objectives (R1 181 mil –
89%)
1.1 To promote compliance and good
governance
2.1 To conducive legislative and
policy environment for SMMEs and
cooperatives
3.1 To design and implement targeted
programmes to support new and
existing small and medium
enterprises in townships and rural
towns
1.2 To drive sound financial
management and controls
2.2 To drive integrated planning and
monitoring for SMMEs and
cooperatives development
3.2 To increase participation of
SMMEs and Cooperatives in the
mainstream economy
1.3 To maintain a sound performance
planning, reporting and monitoring
and evaluation system
2.3 To drive a comprehensive
research agenda
3.3 To coordinate and maximise
support for SMMEs and cooperatives
through public and private
partnerships
1.4 To build human resource
capability and promote culture of high
performance
2.4 To develop and implement a
relevant international relations
strategy
1.5 To promote external and internal
communication on the work of the
department
16
Organisational Structure
MINISTER
DEPUTY
MINISTER
DIRECTORGENERAL
OFFICE OF THE
DG
CHIEF FINANCIAL
OFFICER
DDG:
ADMINISTRATION
INTERNAL AUDIT
DDG:
POLICY AND
RESEARCH
DDG:
PROGRAMME
DESIGN &
SUPPORT
17
Programme Structure
PROGRAMME
SUB-PROGRAMME
1. ADMINISTRATION
1.1 Ministry
1.2 Departmental Management
1.3 Corporate Services
1.4 Financial Management
1.5 Communications
2. SMMEs & COOPERATIVES: POLICY
AND RESEARCH
2.1 Policy and Research
2.2 Monitoring and Evaluation
2.3 International Relations
3. SMMEs & COOPERATIVES:
PROGRAMME DESIGN AND SUPPORT
3.1 Competitiveness Support
3.2 Enterprise Development
3.3 Market Development and Stakeholder
Relations
3.4 Cooperative Development
3.5 SMME Development Finance
18
Total Expenditure Allocations
Adjusted
appropriation
Audited outcome
Programme
2015/16
MTEF
2012/13
2013/14
2014/15
2016/17
2017/18
2018/19
9 526
13 452
45 030
81 387
118 080
121 532
125 059
SMMEs and Cooperatives Policy and
Research
10 445
13 527
12 158
11 711
26 105
26 243
29 104
SMMEs and Cooperatives Programme
Design and Support
821 614
1 012 569
1 027 380
1 034 422
1 181 254
1 311 678
1 385 816
841 585
1 039 548
1 084 568
Administration
Total
1 127 520
1 325 439
1 459 453
1 539 979
19
Programme 1
Strategic Management
1.1.1 Strategic Plan
1.1.2 Annual Performance Plan
1.3.1 Monitoring
1.3.2 Evaluation
1.3.3 Planning for Implementation Programmes
HR Management
3.1.1 Human Resources Plan
3.1.2 Organisational Design
3.1.3 HRD Plan
3.2.2 Recruitment
3.2.4 Diversity
3.2.5 Employee Wellness
3.2.6 Delegation PSA
3.3.1 PMDS 1-12
3.3.2 PMDS SMS
3.3.3 PMDS HOD
3.4.2 Disciplinary cases
Governance & Accountability
2. 1.1 SDIP
2. 2.1 Management Structure
2. 3.2 Audit Committee
2. 4.1 Ethics
2. 4.2 Fraud prevention
2. 5.1 Internal Audit
2. 6.1 Risk Management
2. 8.1 Corporate Governance ICT
2.9.1 PAJA
2.10.1 PAIA
Financial Management
4.1.1 Demand Management
4.1.2 Acquisition Management
4.1.3 Logistics management
4.1.4 Disposal management
4.2.1 Cash flow
4.2.2 Payment of suppliers
4.2.3 Unauthorised
4.2.4 Payroll certificates
4.2.5 Delegation PFMA
20
Expenditure performance: Programme 1
Performance and expenditure trends for Programme 1: Administration
• The spending focus over the medium term for Programme 1: Administration will be on
the sub-programmes Management, Corporate Services, Financial Management, and
Communications.
• The bulk of the budget (40%) is allocated for the Corporate Services such as Human
Resources Management and Supply Chain Management.
• Under economic classification, compensation of employees and goods and services
make up the most of the budget with 54.9% and 42.7% respectively.
• The personnel numbers are expected to increase in the medium term with the filling
of critical vacant positions to ensure strong leadership, management and support
functions to the Minister, Deputy Minister, Director-General and the Department.
21
Expenditure estimates: Programme 1
Programmes
Audited outcome
2012/13
R ‘000
Ministry
9 526
2013/14
R ‘000
13 452
2014/15
R ‘000
45 030
Adjusted
appropria
tion
2015/16
Medium-term expenditure
estimate
2016/17
2017/18
2018/19
R ‘000
R ‘000
R ‘000
R ‘000
30 896
26 133
26 652
27 056
Departmental
Management
21 187
18 950
19 710
19 613
Corporate
Services
29 304
47 027
47 787
49 595
Financial
Management
14 972
16 130
16 807
Communications
10 998
11 253
11 988
118 080
121 533
125 059
TOTAL
9 526
13 452
45 030
81 387
22
Expenditure estimates: Programme 1…
Programmes
Compensati
on of
employees
Goods &
services
Transfers
and
subsidies
Payments for
capital
assets
TOTAL
Audited outcome
2012/13
2013/14
2014/15
Adjusted
appropriation
2015/16
Medium-term expenditure estimate
R ‘ 000
R ‘ 000
R ‘ 000
R ‘ 000
3 058
3 837
21 141
44 574
64 765
67 639
67 698
6 378
8 702
19 857
34 981
50 475
52 703
56 258
39
-
51
913
4 032
1 832
9 526
13 452
45 030
81 387
2016/17
2017/18
2018/19
R ‘ 000
R ‘ 000
R ‘ 000
2 840
118 080
1 190
121 532
1 103
125 059
23
QUARTERLY TARGETS: Programme 2
Performance Indicator
15.
16.
17.
Baseline
2015/16
Conduct
consultation
stakeholder
engagements on
the amendments of
the Small Business
Act of 2004
Reviewed and
approved Integrated
Strategy on the
Promotion of
Entrepreneurship
and Small
Enterprises
Consultative
stakeholder
engagements
Research report on
legislative and
regulatory protocols
impeding SMMEs
and Cooperatives
concluded
Institutionalisa
tion of Red
Tape
Reduction
Guidelines
None
Annual Target
2016/17
Targeted
stakeholder
consultations on
the amendment of
the National Small
Business Act of
1996 as amended
Reviewed
Integrated Strategy
on the Promotion of
Entrepreneurship
and Small
Enterprises
Research report on
legislative and
regulatory protocols
impeding SMMEs
concluded
Quarterly Targets
1st
Stakeholder
consultations
2nd
Stakeholder
consultations
Scoping
report/analysis
(areas to be
amended,
statistics, data)
Consultations Consultation
with relevant s with
stakeholders relevant
stakeholders
Inception report
on legislative
and regulatory
protocols
impeding
SMMEs
concluded
Draft report
on legislative
and
regulatory
protocols
impeding
SMMEs
concluded
3rd
Drafting of
proposed
amendments
to existing
legislation
Report on
stakeholder
consultations
Preliminary
report on
legislative
and
regulatory
protocols
impeding
SMMEs
concluded
4th
Proposed
amendments
submitted to
the Minister
for
consideration
Framework
approved by
Executive
Authority
Final report on
legislative and
regulatory
protocols
impeding
SMMEs
concluded
24
QUARTERLY TARGETS: Programme 2
Performance Indicator
Baseline
2015/16
Annual Target
2016/17
Quarterly Targets
1st
2nd
3rd
4th
18.
A monitoring
None
framework to monitor
SMMEs and
Cooperatives support,
in terms of 30% public
sector procurement
programme,
developed
Develop and
implement a
Monitoring
framework to monitor
SMMEs and
Cooperatives
support, in terms of
30% public sector
procurement
programme
Develop the
Monitoring
framework to
monitor SMMEs
and
Cooperatives
support, in
terms of 30%
public sector
procurement
programme
Test and pilot
the Monitoring
framework to
monitor
SMMEs and
Cooperatives
support, in
terms of 30%
public sector
procurement
programme
Implement
the
Monitoring
framework to
monitor
SMMEs and
Cooperatives
support, in
terms of
30% public
sector
procurement
programme
Implement the
Monitoring
framework to
monitor
SMMEs and
Cooperatives
support, in
terms of 30%
public sector
procurement
programme
19.
50% of total number
enterprises supported
are women-owned
None
50% of total number
of enterprises
supported are
women-owned
50% of total
number of
enterprises
supported are
women-owned
50% of total
number of
enterprises
supported are
women-owned
50% of total
number of
enterprises
supported are
women-owned
20.
30% of total number
enterprises supported
are youth-owned
None
30% of total number
of enterprises
supported are youthowned
30% of total
number of
enterprises
supported are
youth-owned
30% of total
number of
enterprises
supported are
youth-owned
50% of total
number of
enterprises
supported
are womenowned
30% of total
number of
enterprises
supported
are youthowned
30% of total
number of
enterprises
supported are
youth-owned
25
QUARTERLY TARGETS: Programme 2
Performance Indicator
Baseline
2015/16
Annual Target
2016/17
Quarterly Targets
1st
2nd
3rd
4th
50% of total
number of
enterprises
supported are
from
townships
30% total
number of
enterprises
supported are
from rural
areas
50% of total
number of
enterprises
supported are
from townships
Draft
research
report on key
areas of
support
considered
Present report
key findings and
recommendatio
ns to Executive
Authority
21.
50% of total number
of enterprises
supported are from
townships
None
50% of total
number of
enterprises
supported are
from townships
50% of total
number of
enterprises
supported are
from townships
50% of total
number of
enterprises
supported are
from townships
22.
30% total number of
enterprises supported
are from rural areas
None
30% total number
of enterprises
supported are
from rural areas
30% total
number of
enterprises
supported are
from rural areas
30% total
number of
enterprises
supported are
from rural
areas
23.
Research reports on
SMMEs and Cooperatives key areas
of support
None
2 Research
reports on key
areas of support
to SMMEs and
Co-operatives
Terms of
Reference
issued
Research
initiated
30% total
number of
enterprises
supported are
from rural areas
26
QUARTERLY TARGETS: Programme 2
Performance Indicator
Baseline
2015/16
Annual
Target
2016/17
Quarterly Targets
1st
2nd
3rd
4th
24.
Programme
Evaluation reports
on the planning,
design and
implementation of
SMMEs and
Cooperatives
programmes
None
1 programme
evaluated
Develop a
programme
evaluation
plan
Draft
evaluation
report on
programmes
planning,
design and
implementation
Preliminary
evaluation
report on
programmes
planning,
design and
implementation
Final
evaluation
report on
programmes
planning,
design and
implementation
25.
Approved
international
relations strategy
None
Approved
international
relations
strategy
Preliminary
research
on best
internation
al relations
strategies
conducted
Consultation
with public and
private sectors
Draft strategy
on international
relations
compiled
Further
consultations
Strategy on
international
relations
approved by
Exco and
Executive
Authority
27
Expenditure performance: Programme 2
Performance and expenditure trends for Programme 2: SMMEs and
Cooperatives Policy and Research
• Programme 2 has an allocation of R81.5 million over the medium-term
• The Policy, Research and Legislation sub-programme has 71.8% (R58.5
million) of the budget
• Monitoring and Evaluation – allocated the rest of the budget (R23.0
million)
• The spending focus over the medium term for Programme 2 will be on:
• Reviewing the Strategy for SMME development and
entrepreneurship
• Research on inhibitive legislative and regulatory protocols
• Collaborative and Integrated planning with provinces and local
governments
• Developing the International Relations Strategy
28
Expenditure estimates: Programme 2
Programmes
Policy,
Research
and
Legislation
Audited outcome
2012/13
2013/14
2014/15
Adjusted
appropriation
2015/16
R ‘000
R ‘000
R ‘000
R ‘000
10 445
13 527
12 158
11 711
Monitoring
and
Evaluation
Total
10 445
13 527
12 158
11 711
Medium-term expenditure estimate
2016/17
2017/18
2018/19
R ‘000
R ‘000
R ‘000
18 536
18 698
21 226
7 569
7 545
7 878
26 105
26 243
29 104
29
Expenditure estimates: Programme 2…
Programmes
Audited outcome
2012/13
2013/14
2014/15
Adjusted
appropriation
2015/16
R ‘000
R ‘000
R ‘000
R ‘000
Medium-term expenditure estimate
2016/17
2017/18
2018/19
R ‘000
R ‘000
R ‘000
Compensation
of employees
6 569
7 801
10 253
9 545
14 186
14 184
15 896
3 662
5 636
1 857
2 074
11 589
11 714
12 833
103
55
3
111
35
45
10 445
13 527
12 158
Goods &
services
Transfers and
subsidies
Payments for
capital assets
TOTAL
92
11 711
330
26 105
345
26 243
375
29 104
30
QUARTERLY TARGETS: Programme 3
Performance Indicator
Baseline
2015/16
Annual Target
2016/17
Quarterly Targets
26.
Informal
businesses
supported through
the IMEDP
1000 informal
businesses
supported
through the
IMEDP
7000 informal
businesses
supported through
the IMEDP
1st
Recruitment of
beneficiaries
and sites for
IMEDP roll-out
2nd
2000 informal
businesses
supported
through the
IMEDP
3rd
2500 informal
businesses
supported
through the
IMEDP
4th
2500 informal
businesses
supported
through the
IMEDP
27.
Informal Business
Infrastructure
through Seif
5 informal
Business
Infrastructure
s through Seif
6 informal
Business
Infrastructure
through Seif
Finalization of
applications and
approval of sites
for the year
2 informal
Business
Infrastructure
through Seif
3 informal
Business
Infrastructure
through Seif
1 informal
Business
Infrastructure
through Seif
28.
Rescue Strategy
developed
Draft Concept
document on
business
rescue
strategy for
Small
Enterprises
and Cooperatives
developed
Rescue Strategy
for small
enterprises and
co-operatives
developed
Scoping report
on available
financial and
non-financial
support at
national as well
as provincial
level.
Consultations
and gap
analysis
report.
Framework
for Rescue
Strategy
developed
and
approved by
Exco
Draft strategy
approved
Executive
Authority
31
QUARTERLY TARGETS: Programme 3
Performance Indicator
Baseline
2015/16
Annual Target
2016/17
Quarterly Targets
1st
2nd
3rd
4th
29.
Established CDA
None
Established CDA
Refine and retable the
business case
Alignment
process with
DSBD
business
processes
Establishmen Launch/
t of the CDA
public
awareness
30.
Co-operatives
supported through
CIS
350 cooperatives
supported
through the
CIS
370 cooperatives
supported
through CIS
85 cooperatives
supported
through CIS
115 cooperatives
supported
through CIS
125 cooperatives
supported
through CIS
45 cooperatives
supported
through
CIS
31.
Co-operatives
supported through
training
200 cooperatives
supported
through
training
250 cooperatives
supported
through training
50 cooperatives
supported
through
training
75 cooperatives
supported
through
training
75 cooperatives
supported
through
training
50 cooperatives
supported
through
training
32
QUARTERLY TARGETS: Programme 3
Performance Indicator
Baseline
2015/16
Annual Target
2016/17
Quarterly Targets
1st
32
Small and medium
enterprises
supported through
financial and nonfinancial support
33.
34.
480 small
and medium
enterprises
supported
through the
BBSDP
2nd
3rd
4th
600 small and medium
enterprises supported
through the BBSDP
100 small and
medium
enterprises
supported
through the
BBSDP
160 small and
medium
enterprises
supported
through the
BBSDP
200 small
and medium
enterprises
supported
through the
BBSDP
140 small and
medium
enterprises
supported
through the
BBSDP
Incubators supported None
through the
Enterprise Incubation
Programme
7 incubators
supported through the
Enterprise Incubation
Programme
Conceptual
document and
guidelines
approved by
Exco and EA
2 incubators
supported
through the
Enterprise
Incubation
Programme
3 incubators
supported
through the
Enterprise
Incubation
Programme
3 incubators
supported
through the
Enterprise
Incubation
Programme
Partnership
agreements entered
into to support
SMMEs and Cooperatives
10 partnership
agreements entered
into to support SMMEs
and Co-operatives
1 partnership
formalised
3 partnerships
formalised
3
partnerships
formalised
3 partnerships
formalized
3
partnership
agreements
entered into
to support
SMMEs and
cooperatives
33
QUARTERLY TARGETS: Programme 3
Performance Indicator
35.
36.
National Colocation
Programme
implemented
Functional InterDepartmental
Small business
and Cooperatives
Development
Coordinating
Committee.
Develop
integrated
planning
framework with
national
departments
Baseline
2015/16
25 colocation
points
established
None
Annual Target
2016/17
National Colocation
Programme
concept document
and
implementation
plan approved.
10 National colocation points
established
Functional InterDepartmental
Small business
and Co-operatives
Development
Coordinating
Committee.
Develop integrated
planning
framework with
national
departments
Quarterly Targets
1st
National Colocation
Programme
concept
document and
implementation
plan approved.
2nd
3 National Colocation points
established
3rd
3 National Colocation points
established
4th
4 National Colocation points
established
National InterDepartmental
Small business
and Cooperatives
Development
Coordinating
Committee
established.
Quarterly reports
prepared based on
the implementation
of recommendations.
Quarterly reports
prepared based on
the
implementation of
recommendations.
Quarterly reports
prepared based
on the
implementation
of
recommendation
s.
Develop integrated
planning framework
with national
departments
34
QUARTERLY TARGETS: Programme 3
Performance Indicator
37.
38.
Develop integrated
planning framework
with provincial
departments
Integrated planning
engagements with
Local government
departments
through LED
forums and reports
produced
Baseline
2015/16
Annual Target
2016/17
3 Quarterly
InterProvincial
Coordinatio
n Committee
meetings
held and
reports
produced
Develop and
implement
integrated
planning
framework with
provincial
departments
None
15 Integrated
planning
engagements
with Local
government
departments
through LED
forums and
reports produced
Quarterly Targets
1st
Develop
integrated
planning
framework with
provincial
departments
2nd
Quarterly InterProvincial
Coordination
report produced
3rd
Quarterly InterProvincial
Coordination
report
produced
4th
Quarterly
InterProvincial
Coordination
report
produced
5 Integrated
planning
engagements
with Local
government
departments
through LED
forums and
reports
produced
3 Integrated
planning
engagements
with Local
government
departments
through LED
forums and
reports
produced
3 Integrated
planning
engagements
with Local
government
departments
through LED
forums and
reports
produced
Quarterly InterProvincial
Coordination
report produced
4 Integrated
planning
engagements
with Local
government
departments
through LED
forums and
reports produced
35
Expenditure performance: Programme 3
Performance and expenditure trends for Programme 3: SMMEs and
Cooperatives Programme Design and Support
• The programme has an allocation of R3.88 billion over the medium-term
expenditure framework.
• The bulk of the estimated expenditure (94.2% or R3.65 billion) is allocated for
transfers and subsidies to the department’s entities that provide financial and
non-financial small business support services.
• Seda is funded under the Enterprise Development programme.
• The BBSDP and CIS are funded under the SMME Development Finance subprogramme.
• Compensation of employees is allocated R174.5 million (4.5%) and the
remaining 1.3% of the budget allocated to payments for capital assets.
36
Expenditure estimates: Programme 3
Programmes
Competitivenes
s Support
Audited outcome
2012/13
2013/14
2014/15
Adjusted
appropriation
2015/16
R ‘ 000
R ‘ 000
R ‘ 000
R ‘ 000
Medium-term expenditure estimate
2016/17
2017/18
2018/19
R ‘ 000
R ‘ 000
R ‘ 000
13 271
16 866
19 349
19 322
108 657
110 665
114 7778
632 092
682 414
675 593
686 052
656 918
766 543
812 164
-
-
3 393
4 841
8 284
8 359
8 653
-
-
-
108
62 562
66 176
71 711
SMMEs
Development
Finance
176 251
313 289
329 045
324 099
344 833
359 935
378 510
Total
821 614
1 012 569
1 027 380
1 181 254
1 311 678
1 385 816
Enterprise
Development
Cooperatives
Development
Market
Development
and Stakeholder
Relations
1 034 422
37
Expenditure estimates: Programme 3
Programmes
Audited outcome
2012/13
2013/14
2014/15
Adjusted
appropriation
2015/16
R ‘ 000
R ‘ 000
R ‘ 000
R ‘ 000
Medium-term expenditure estimate
2016/17
2017/18
2018/19
R ‘ 000
R ‘ 000
R ‘ 000
Compensation
of employees
37 426
43 694
52 563
57 413
57 730
57 237
59 506
18 821
17 433
25 051
17 938
16 728
15 694
16 803
765 022
951 357
949 160
958 372
1 105 786
1 237 703
1 308 379
345
85
606
699
1 010
1 044
1 128
821 614
1 012 569
1 027 380
1 034 422
1 181 254
1 311 678
1 385 816
Goods &
services
Transfers and
subsidies
Payments for
capital assets
Total
38
Coordination and partnerships
• Integration: The department is working with DPME to align
programmes with provincial programmes
• Developing Monitoring framework and
Evaluation System
• Co-location with agencies, provinces, private sector
• Transversal agreements with government departments and
private sector
39
SEDA: Non-Financial Services
Non-financial services
1. Business information & advice
2. Business Management
3. Training and Mentoring
4. Seda Technology Programme
40
SEDA – Network / Accessibility
Province
Seda
Branches
Seda
Supported
Incubators
Co-location
Points
Mobile
Units
Info Kiosks
EC
5
9
5
3
6
FS
5
1
3
5
3
GT
4
17
7
0
6
KZN
6
12
7
2
1
LP
5
3
0
3
1
MPU
5
4
16
0
14
NC
5
2
0
2
3
NW
5
1
0
4
6
WC
15
5
0
0
13
TOTAL
55
54
38
19
53
41
SEDA – Challenges / Corrective Measures
Challenges
Corrective measures
Finalisation of CEO appointment
The DBSD is finalising the appointment.
Insufficient funding to cover the broad 1. DSBD is working through transversal
mandate
agreements to unlock opportunities and
programme funding to augment what Seda has.
2. Also discussions on establishment of a Trust
with the private sector for small enterprise
development support.
Capacity of practitioners to service
1. A competency framework and competency
profiling to determine the gaps and appropriate
measures to improve capacity.
2. Working with institutions of higher learning
such as the North West University on
augmenting business advisor capacity.
42
SEDA – ACCESSIBLITY
43
SEFA – Financial Services
2. SEFA
Financial services
• Micro Enterprises: R500 – R50 000
• SME Financing: R50 000 – R5 000 000
1. Direct Lending
2. Wholesale Lending
3. Credit Guarantees
4. Pre and Post Loan Business Support
44
SEFA – Disbursments
Approvals
Disbursements
2014/15
2015/16
actual
unaudited
R’m
R’m
1 009
1 295
1 108
1 161
• The overall disbursements of close to R1.3 billion in 2014/15 reflected an
acceleration of 21% compared to the previous financial year.
• However, the tough economic conditions over the past financial year, which
had a dampening effect on demand, could not allow sefa to sustain such a
momentum. Hence, the slight ease in disbursements to R1.1 billion.
45
SEFA – Sectoral Analysis
Sectoral analysis of group loans and advances at carrying value: 2014-15
Other services
Building construction
Agriculture, forestry and fishing
Transport and storage
Business services
Wholesale and retail trade
Food
Other industries
Motor vehicles, parts and accessories
Catering and accommodation services
Other mining
Medical, dental and other health and veterinary services
Other community, social and personal services
Printing, publishing and recorded media
Wood and wooden products
Beverages
Other chemicals and man-made fibres
Non-metallic minerals
Wearing apparel
Textiles
Metal products excluding machinery
Electricity, gas and steam
Communication
Television, radio and communication equipment
Finance and insurance
Footwear
Basic chemicals
Plastic products
Paper and paper products
222 424
119 970
65 334
61 554
43 763
38 547
13 128
11 231
9 983
9 647
8 095
7 115
6 802
5 518
5 418
4 033
2 934
2 571
2 245
2 180
2 080
2 006
1 638
1 564
1 050
856
623
306
157
46
SEFA – Success Stories
Bathati Cash Loans cc
•
Bathati Cash Loans cc (hereafter “Bathati”) is an incorporated close
corporation with registration number 2006/003433/23. Bathati is 100%
black female owned which initially focused on property. Ms Basetsana
Motsumi the owner of Bathati later identified an opportunity in the
food industry and specifically identified a franchise opportunity with
Captain Dorego Franchise, a part of the spur group, as a viable
opportunity to pursue.
•
Bathati approached sefa for start-up funding for the franchise. Bathati’s
application was approved on the 04th of March 2014 for R812 278. With
this funding, Bathati secured the Captain Dorego Franchise and
commenced operations on the 01st August 2014.
•
Since commencement of operations management has been doing their
best to ensure that all operations run smoothly and that staff are fully
catered for and prepared in terms of their job descriptions.
•
Just like any start-up business, Bathati had it’s own initially challenges
including, but not limited to, staff selection and staff turnover, stock
management, financial and cash flow management. Sefa appointed a
mentor to assist the business.
•
Since then, the business has seen steady improvements in the overall
performance of the store. With steady quarter on quarter financial
performance, they’ve had some good performance periods and some
where they missed target by 10% or less but that has not negatively
impacted the overall profitability of the business.
•
The store was also awarded the best Captain Dorego Franchise store for
2015.
Key information
• Location:
Moruleng (NW)
• Job creation:
10
• Funding amount: R812 278
• Sector: Franchise
47
SEFA – Success Stories
Mokete Farming Co-operative Limited
•
Mokete Farming Co-operative Limited was registered in 2013 by
five (5) siblings of Mokete family. It is 100% youth owned. It is
operating at Veeplaas situated at Makhuduthamaga local
Municipality in the greater Sekhukhune District. The co –
operative was established for the purposes of agriculture and
farming related activities.
•
The client heard about sefa through LEDA.
•
A loan amounting to R326,014.00 was approved for the purchase
of production inputs and the provision of working capital in order
to plant white maize on a 40 hectare in Veeplaas. The Co –
operative had an off-take agreement with NTK for the supply of
300 tonnage of white maize. Technical support and advice was
obtained from NTK from day one until the end of the project.
•
After harvesting, the co-operative realised 289 tonnage of white
maize meal which was sold to NTK .
•
The aforementioned loan was repaid in February 2016 in full and
proceeds from the sale of the maize was re-invested back into
the business. Currently the co-operative has planted sugar beans
and has put up a request for funding with us for R178,000.00 to
finance working capital requirements.
•
The project created 15 permanent jobs.
Key information
• Location: Limpopo & Veeplaas
• Job creation:
15 jobs
• Funding amount: R326, 014,00
• Sector: Agriculture
48
SEFA – Success Stories
WP Timber Products CC
• Thabo Vuyo Sikukula, an East London resident
approached sefa for funding of R 5000 000 to help
finance the 100% purchase of WP Timber Products
CC for a total value of R 7 250 000
• The remaining R 3 750 000 was funded by
Masisizane Fund, an incubator owned by Old Mutual
Investments Limited.
• The entrepreneur holds a Bachelor of Technology
degree from Pretoria University
Key information
• Location:
Stutterheim,
Eastern Cape
• Job creation:
5 jobs created
& 136 Maintained
• Funding amount: R5 million
• Sector: Manufacturing
• WP Timber is a pine wood door manufacturing
business
• The business currently employs 136 women
employees and all those jobs are maintained together
and 5 more jobs have been created.
• The business which is the largest door manufacturer
in Eastern Cape will, for the first time, be fully owned
by a black person aged 41 years
• The business has for the past four years been turning
over R 21 million per annum and has now increased
its revenues to an average R 2 million a month,
projected to be totalling R 22 million per annum.
49
SEFA - Challenges
CHALLENGES
Low collection
rates resulting in
unacceptable high
levels of
Long
impairments
applications
turnaround
times of loan
Repayment of public
contract-based finance
sefa‘s
– cessions from
public entities
for growth
Funding for businesses
sefa’s
property
portfolio
owned by people with
sefa’s
accessibility
disabilities
as well as to other
targeted groups
Internal
capacity
development
Slow uptake of the credit indemnity product
through financial institutions
Balancing sefa’s long term financial
recapitalisation
Addressing the
challenges
associated with the
social economy such
as
cooperatives
and social
enterprises
sustainability with its development objectives
50
SEFA – Causes of defaults
Causes of slow or non-payment in loans by SMMEs
 Entrepreneurs who lack experience in the functional area
of business operation.
 High dependency
on a single contract by the
entrepreneurs.
 Lack of performance evaluation in small business.
 Lack of cessions from the three tiers of government
agencies.
51
SEFA – Corrective Measures
Corrective measures being taken to address the challenges
• Implementing a pro-active approach in the identification of early
warning signals for portfolio investments
• Enhance the Investment Monitoring and management processes
and introducing it across all segments of the portfolio
• Implement a differentiated approach towards the monitoring of
different loan types.
• Establish Workout and Restructuring capacity and a dedicated
collection function
• Establish a Mentorship and business support programme to
develop client sustainability.
• Establish partnerships to provide value added services to sefa
clients.
• System enhancement and automation – automation, dash board
reporting, collateral management system
52
SEFA – ACCESSIBLITY
53
Monitoring & evaluation of entities
• Signing of Shareholder Compacts
• Assessment of quarterly reports performance against
compact and corporate plans
• Quarterly meetings between the department and its
entities
• Regular site visits as part of the monitoring and
evaluation systems
54
WAY FORWARD
• Implement Service Delivery Improvement Plan
• Spatial Focus – to direct focus
– FREE STATE
– MPUMALANGA
– NORTH WEST
– NORTHERN CAPE
– LIMPOPO
– EASTERN CAPE
55