By Lehlohonolo Lehana.
President Cyril Ramaphosa has urged financial institutions to seize the opportunity presented by declining interest rates to bolster funding for small businesses.
Ramaphosa was speaking at the awards held at the Gallagher Convention Centre in Gauteng on Friday.
Hosted by the Department of Small Business Development, the Presidential Micro, Small and Medium Enterprises (MSMEs) and Cooperatives Awards are aimed at highlighting and rewarding the achievements of South Africa’s top-performing MSMEs, cooperatives, and ecosystem enablers who drive growth and transformation across the nation.
The ceremony honoured businesses that embody innovation, commitment to local development and entrepreneurial spirit.
“This is the time to make finance available and pump energy and life into our economy because when small and medium enterprises are given enabling energy by our financial institutions… they will be able to run businesses to be creative, to create jobs and our economy can grow.
“I call on the banks and financial institutes to make money available so that our businesses can grow,” the President said.
Ramaphosa also took a moment to address the recent spate of foodborne illnesses that have been linked to spaza shops and informal traders in townships. He said this has thrown into sharp focus the issues of regulation, health and safety.
He said the issue has highlighted the critical role small businesses play in communities, providing much-needed services and supporting local economies.
“That is why it is so important to bring small businesses into the mainstream of the economy, and that we provide the necessary support for them to do this.
“International experience shows that MSMEs are drivers of sustainable growth. Countries with more MSMEs tend to have lower levels of inequality. Entrepreneurs are the drivers of innovation, “he said.
However, the President acknowledged that rates of entrepreneurship in South Africa are low by continental standards.
He told entrepreneurs and delegates at the awards that it is essential that they encourage entrepreneurship.
“It is vital that we enable the emergence and growth of MSMEs and cooperatives. We must focus on targeted interventions to address financial exclusion and onerous regulatory requirements.”
“We must provide access to funding, capacity building and other support. The success of the finalists here this evening shows that with the right support, small businesses can succeed, expand and be sustainable,” the President said.
The President said that the Government of National unity has made inclusive growth and job creation its apex priority, and supporting small enterprises is an integral part of these efforts.
Ramaphosa said the National Planning Commission estimates that the country needs 5.8 million MSMEs to meet job creation targets.
The President said that this means there is a need to double the number of MSMEs in the country.
“We are encouraged by the efforts underway to capacitate the sector. One of these is the merging of SEFA [Small Enterprise Finance Agency], SEDA [Small Enterprise Development Agency] and the Cooperatives Bank Development Agency into the newly-formed Small Enterprise Development Finance Agency.