'We aim to improve the SMME sector'

Colin Leshou, Provincial Manager in Gauteng for SEDA.
Colin Leshou, Provincial Manager in Gauteng for SEDA.
Image: Veli Nhlapo

The Small Enterprise Development Agency (Seda) is aiming to improve its services by reaching previously under-serviced areas, Seda Gauteng provincial manager Colin Leshou said at the Sowetan Dialogues held at Gold Reef City recently.

Leshou said Seda wanted to improve the sustainability of small and medium enterprises (SMEs) and co-operatives, as well as to reach under serviced areas, while also supporting Seda clients.

"As an organisation, we cannot do business development on our own and that is why we always go into partnership with stakeholders that could assist us in terms of bringing interventions to our SMEs and clients that need it the most," he said.

"Some of the programmes we have are business advisory services, mentorship and coaching, an incubation programme, supplier development programme, access to local and international markets, basic entrepreneurial skills, export readiness and facilitation, and our technology transfer," Leshou said.

He said the agency's vision was to be the centre of excellence for small enterprise development in SA.

"Our mission is to develop, support and promote small enterprises to ensure that they grow and are sustainable. We are customer service-oriented and behave in an ethical manner. Our goal is to ensure the small enterprise sector grows and increases its contribution to sustainable and equitable social and economic contribution, employment and wealth creation," he said.

Some of the key challenges facing SMEs in SA include the scarcity of reliable periodic data.

"Statistics are limited to sources such as the Finsbook Survey and the Global Entrepreneurship Monitor [the General Report]."

He said this limits the ability of government to conduct sector-specific analysis and to design policy interventions.

Leshou said there is an upward trend in the number of SMEs since 2000.

"According to the DTI [department of trade & industry] review on small businesses for the period 2005-2007 an estimate of 1.6 million small businesses was recorded. An additional review [was] commissioned by the DTI for the 2.4 million small businesses in 2007."

Leshou explained that the Finscope SA small business survey 2010, which is the most recent survey, estimated that there were 5.6 million SMEs in the country.

"But the Global Entrepreneurship Monitor estimated the figure at 2.6 million small businesses," he said.

He said SMEs contributed 35% to GDP in 2007, while the target range for future GDP contributions ranges from 60% to 80% over the next 10 years.

"Only in 2015 did the statistician-general acknowledge the contribution of small businesses to the economy," Leshou said.

He said the private sector employment estimates are 56% to 61%, while the gross capital formation is at 21%.

"With regards to exports, its contribution is markedly low."

He said it is estimated that that 2% of SMEs are export oriented. "Once again this speaks to access to markets. Do we know where the markets are for these SMEs to export their goods."

Leshou said the established business activity rate stood at 2.9%.

"This is the number of small businesses that have been able to survive beyond three years. It's a low figure when we compared to 15.4% in Brazil, 8.5 % in Chile, 28% in Thailand, 11% in China, and 6% in Malaysia.

"Sixty-four percent of survivalist enterprises were run by women, 92% of survivalist and 82% of micro enterprises were black owned, which is indicative of the country's demographics. Seventy-five percent of micro enterprises were informal businesses while 87% were formal businesses, which meant that those were businesses that were registered with the Commission of Intellectual Properties and Companies," he said.

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