Potential for rural areas

Home-based businesses in townships and rural areas can offer great opportunities for households to generate income and contribute to the local economy, according to a new survey.

Home-based businesses in townships and rural areas can offer great opportunities for households to generate income and contribute to the local economy, according to a new survey.

"Home-based enterprises offer residents an opportunity to generate an income while also building the value of their housing asset," said FinMark Trust's Kercia Rust at the Annual Small Business Summit held earlier this week.

The research estimated that about 355000 home-based entrepreneurs were active across various inner-cities and townships, comprising about 13 percent of the population and generating about R476million a month.

Conducted by Shisaka Development Management Services from July last year until May this year, the survey was jointly funded by FinMark Trust, the Social Housing Foundation, Nedbank and the Housing Department.

It was conducted across retail, which includes spaza shops, the services sector - hair salons, traditional healers, taxi owners and shebeen operators - and production - gate manufacturers and clothing designers.

"By definition, they operate in residential areas, enhancing access to services and products by low-income households and contributing to the development of sustainable human settlements," said Rust.

Though most of these businesses were classified as small or micro, she said, they were the only income to the operators.

"In low-income areas they are mostly informal in nature and survivalist in scale, but often are the only source of income for the household," she said.

With the government having set targets to halve unemployment and poverty by 2014, Rust called for the financial and business sectors to support these small enterprises.

Sizwe Tati, managing executive for small businesses at Absa, agreed and said that financial institutions needed to be the "pillar of support" for these businesses.

"We need to go beyond banking and be able to assess willingness and resilience, we have to unlock their talent," he said. - BuaNews

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