SMALL MEDIUM AND MICRO ENTERPRISES

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SMALL MEDIUM AND MICRO ENTERPRISES

• A SOUTH AFRICAN PERSPECTIVE

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SOUTH AFRICA AT A GLANCE

• Area 1,219, 090 km2
• Population 44,8m
• Currency 1 Rand 100 cents
• Time GMT 2 hrs
• Head of State President Thabo M Mbeki
• 11 Official languages with English the business
  language
• Total GDP R1 523 bn (2005) (US 215 bn)
• GDP per capita R31 850 (2005) (US 4 568)
• Real GDP Growth 4.9 (2005)
• Inflation (CPIX) 4.1 (annual 2005 average)
• Exports Gold, minerals, diamonds, metals and
  metal products, food, automotive components
• Main trading partners Germany, USA, China, Japan,
  France

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SOUTH AFRICA AN EMERGING MARKET OF NOTE

• SOUTH AFRICA TODAY IS ONE OF THE MOST
  SOPHISTICATED AND PROMISING EMERGING MARKETS
  GLOBALLY, MAINLY BECAUSE OF
• ABUNDANT NATURAL RESOURCES
• EXCELLENT TRANSPORT AND LOGISTICAL INFRASTRUCURE
• WORLD CLASS FINANCIAL SYSTEM
• ECONOMIC STABILITY SOUND MACRO-ECONOMIC
  MANAGEMENT.
• COMPETITIVE SECTORS / INDUSTRIES
• RELATIVELY LARGE LABOUR FORCE.

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SOUTH AFRICA FROM A GLOBAL PERSPECTIVE

• South Africa is one of the most sophisticated and
  promising emerging markets, offering a unique
  combination of highly developed first world
  economic infrastructure with a vibrant emerging
  market economy.
• South Africa is one of the worlds 26
  industrialised nations.
• The country is also regarded as the gateway to
  Africa.
• South Africa has the largest economy on the
  African continent, accounting for approximately
  25 of the continents GDP.
• According to the World Bank, South Africa ranked
  28th in the world for the ease of doing business
  in 2006.
• The JSE Securities Exchange is Africas largest
  and most developed Securities Exchange and one of
  the worlds top 20 exchanges.

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SOUTH AFRICA FROM A GLOBAL PERSPECTIVE

• South Africa remains the worlds top producer of
  minerals such as gold, platinum, rhodium, chrome,
  manganese and vanadium.
• South Africa holds 80 of global manganese
  reserves, 72 of chrome, 88 of platinum-group
  metals (PGMs), 40 of gold and 27 of vanadium.
• Unit labour costs in South Africa are
  significantly lower than those of many other
  emerging markets.
• South Africa scored well in various categories
  according to the 2006 World Competitiveness
  Yearbook (61 countries ranked)
• Ranked 6th in the world in terms of price
  stability
• Our fiscal policy was ranked in 11th place
• 24th position in terms of management practices
  (business efficiency)
• 31st place in terms of attractiveness for foreign
  direct investment and
• SA has the lowest electricity costs for
  industrial clients.

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THE STATE OF SMALL BUSINESS PERFOMANCE

• Small enterprise growth reached 7 growth rate.
• Almost 40 000 new entrants annually.
• 40 GDP Contribution.
• Main Contributing Sectors
• Construction, Transport, Telecommunications and
  financial services.

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IMPORTANCE OF SMMES IN THE ECONOMY

• ADVANCEMENT OF INFORMAL BUSINESS SECTORS.
• SUSTAINABLE BUSINESS SECTORS
• ALLOWS FOR PARTNERSHIPS BETWEEN GOVERNMENT
  AGENCIES AND THE PRIVATE SECTOR FOR ADDRESSING
  THE ECONOMIC CHALLENGES FACING THE COUNTRY.

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INSTITUTIONAL ARRANGEMENT

• SMALL ENTERPRISE DEVELOPMENT AGENCY
• KHULA ENTERPRISE FINANCE
• SOUTH AFRICAN MICRO FINANCE APEX FUND
• THE DTI INCENTIVES
• INDUSTRIAL DEVELOPMENT COOPERATIONAND NATIONAL
  EMPOWERMENT FUND.

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SOUTH AFRICAN MICRO FINANCE APEX FUND (SAMAF)

• Established to address poverty alleviation and
  provide sustained access to financial services
  for the poor.
• Autonomous institutions that operate independent
  from government, provides for the following
• Access to affordable financial services
• Institutional and client capacity building
• Savings mobilization through co operations and
  other formations such as societies and stokvels.

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SEDA

• Special Programmes involve the following
• Manufacturing Advice and Marketing support
  services and mentoring, Research, Market
  Linkages, Service provider partnership and
  development.
• Business start up Service Business
  registration, Business Planning and capacity
  building
• Cooperative support
• Facilitation of Access to finance
• Technology demonstration Centers

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KHULA ENTEPRISE

• Wholesale finance targeting retail finance
  intermediaries.
• Credit indemnity schemes targeting commercial
  banks.
• Partnership with the public sector on pilot
  projects to boost upcoming businesses.

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GOVERNMENT INCENTIVES

• Cooperative incentive schemes (CIS) Start up
  support for cooperatives.
• Cooperative special project fund (CSPF) New
  programme designed to support small to medium
  cooperatives with huge impact on employment.
• None financial support Capacity building for
  practitioners
• Cooperatives pre incorporation seminars /
  workshop for coop members.

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SMME RELATIONSHIP WITH BEE ( BLACK ECONOMIC
EMPOWERMENT)

• BEE DEFINED An integrated and coherent
  socio-economic process that directly contributes
  to the economic transformation of South Africa
  and brings about significant increases in the
  numbers of black people that manage , own and
  control the countrys economy as well as
  significant decreases in income inequalities.

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RELATIONSHIP BETWEEN SMMES AND BEE

• BEE-SMMES refers to those companies which are
  small, medium or macro with a turnover of up to
  10 million rands per annum and which has more
  that 50 direct ownership and management by black
  people.
• SMMES are beneficiaries of BEE initiatives and
  they also contribute to the process.

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SHOPRITE CASE STUDY

• Shop rite Holdings and the Department of trade
  and Industrys Khula Enterprise Finance have
  signed a groundbreaking agreement .
• Granting of retail franchise concessions.
• Training , mentoring and support to black
  entrepreneurs.
• Shoprite and Khula provide dual guidance in terms
  of training and mentoring the SMMEs.
• Khula provides loans to concession holders to
  acquire equipment and furnish their stores.
• Shoprite provides initial stock consignment to
  concession holders .

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RESULTS

• Project is a success and has been declared a
  partnership that would be a model for future
  partnerships between government agencies and
  private sector for addressing some of the
  economic challenges facing the country.
• Similar joint venture initiatives across
  different industries such as mining and petroleum.

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CONTACT

CONTACT MS SHIRLEY MAKHAYA MR
THABO MAFOKO MR GOERGE
BEZOUMATOV 7 (495)
5401177 E-MAIL tradesa_at_econsa.ru