Supporting South Africa’s MSMEs

Acting Director-General (Acting DG) of the Government Communication and Information System (GCIS), Nomonde Mnukwa, has highlighted key funding mechanisms available to micro, small, and medium enterprises (MSMEs) through the Department of Small Business Development. 

“The Department of Small Business Development, along with its merged entities – the Small Enterprise Development Agency and the Small Enterprise Finance Agency, now known as the Small Enterprise Development Finance Agency – now offers a single point of access for both financial and non-financial support, simplifying the process for entrepreneurs,” she told SAnews.

The non-financial support includes capacity building, training, and assistance with business plans.

Financial support is provided through various funding models, including grants, blended finance (a mix of grants and loans), and low-interest loans with favourable rates compared to ordinary banks. 

In addition to these broad initiatives, there are sector-specific programmes, such as the Small Enterprise and Manufacturing Programme, which funds working capital and equipment for manufacturing enterprises, and the Spaza-Shop Support Programme, which is targeted at township and rural entrepreneurs who own spaza shops, general dealers or grocery stores.

There is also the Amavulandlela Funding Scheme grant which offers an opportunity for South Africans with disabilities to enter the mainstream economy and build qualifying entrepreneurial enterprises. The grant provides credit facilities that range from a minimum of R50,000 to a maximum of R15-million.

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“Each of these programmes has different qualifying criteria, so it’s essential for applicants to check the specific requirements. However, at the informal level, such as in informal settlements, there are fewer requirements. Entrepreneurs don’t need to be registered with SARS (South African Revenue Service) or have a business bank account: if they have a valid ID, a personal bank account, and a trading certificate from the municipality, they can qualify. 

“This is based on the recognition that many of us were raised by mothers who supported us by selling vegetables or amagwinya (vetkoek) on the streets, contributing significantly to the economy,” Mnukwa said.

Agricultural and rural enterprise support Mnukwa also highlighted the work being done in collaboration with the Department of Agriculture, Land Reform, and Rural Development to support smallholder farmers and rural enterprises. 

These efforts provide farmers with equipment, training, and market linkages, contributing to the broader goal of building an inclusive economy. She added that the government’s large-scale land restitution and redistribution programme is also making headway, with 24% of South Africa’s farmland now owned by black farmers.

The comprehensive support for small businesses, Mnukwa emphasised, is not limited to financial aid but includes extensive training, mentorship, and market access initiatives.

“The government is deliberate in ensuring that small businesses, especially those from disadvantaged communities, have access to the tools they need to grow and succeed,” she said.

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There is also the National Rural Youth Service Corps programme which targets unemployed rural youth aged between 18 and 25 in possession of Grade 12 as part of the rural economy transformation strategy.

“The programme develops the skills of targeted participants through various skills development initiatives in partnership with other public and private sector institutions.

“It exposes participants to different skills fields which focus on instilling a culture of discipline, patriotism, community service as well as technical and vocational skills that equip participants with skills in construction, agriculture, household profiling, welding and records management amongst others,” she said. 

Through these varied programmes and a strong focus on inclusivity, Mnukwa said the government aims to ensure that MSMEs continue to drive South Africa’s economic growth and create jobs, helping to reduce unemployment and address long-standing inequalities.

This article is sponsored by the Government Communication and Information System (GCIS).

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