The Department of Small Business Development has unveiled the second-wave of financial relief schemes that are expected to come to the rescue of township and village cooperates adversely affected by the COVID-19 lockdown.
Small Business Development Minister Khumbudzo Ntshavheni announced the interventions in a statement on Saturday. The schemes will benefit informal, micro and small enterprises including cooperatives based in townships and villages. The intervention is in addition to the Spaza Support Scheme unveiled in March.
“The dedicated support programmes for township and village-based enterprises are in line with the Department’s Township and Rural Entrepreneurship Programme (TREP) that was approved by Cabinet in February 2020.
“With the re-opening of the economy, the township and village economies require special focus if government is to achieve the aspirations of the new economy post-COVID-19 which were clearly articulated by President Cyril Ramaphosa,” Ntshavheni said.
Qualifying entrepreneurs can apply to the Small-scale bakeries and confectioneries support scheme; informal and small-scale clothing and textile support scheme; and the Automotive Aftermarkets Support.
Small Scale Bakeries and Confectionaries Business Support Scheme
The scheme is aimed at supporting small scale bakeries and confectioneries operating as micro or informal businesses, support assistance to purchase business equipment and provision of working capital.
The financial package, through SEFA, is structured to cover cost of equipment and working capital.
The department said the Minister is committed to a programme of ensuring that spaza shops become critical markets for products made by other small businesses.
Small Scale and Micro Clothing and Textile Business Support Scheme for enterprises located in townships and villages
The Scheme is aimed at supporting small scale, micro and informal businesses in the clothing and textile industry to:
- seize opportunities in the sector availed by the COVID-19 pandemic such as production of personal protective equipment (PPE) in the COVID-19 response value chains and beyond;
- participate in the rebuilding and restructuring of the clothing and textile sector as necessitated by the emergence of the new world order; and
- improve the quality and competitiveness of small scale clothing and textile enterprises for both domestic supply and export market.
The department, said Ntshavheni, is of the view that the economic climate will witness either a consolidation of big clothing retailers and manufacturers into fewer players or demise of the same post-COVID-19.
“Any of these unfortunate consequences will invariably create an opportunity for small players, including co-operatives, that at times will be formed by former workers of these giants to participate as owners of their businesses in the sector,” said the department.
Automotive Aftermarkets Support Scheme
This scheme offers targeted support and development of the small/ independent automotive aftermarket enterprises, including informal businesses that are located in townships and villages.
It covers supporting qualified motor body repairers to operate accredited small /independent panel beaters (motor body repairers) centres. It will also support qualified motor mechanics to operate authorized service centres. Small/ independent auto-spares shops to serve as distributors of automotive aftermarket spare parts centres.
“The support covers working capital, facilitating the accreditation of the small/ micro and participation in a SEFA-backed revolving credit facility, through participating banks, between participating motor mechanics/ motor body repairers with participating auto spares shops and fitment centres,” said the department.
Additional business development support through SEDA includes:
- Facilitate trade test certification (for those not certified but must hold N3 college qualification), where it is required
- Assistance to enrol with the insurance industry and/ or car service centres through facilitating accreditation with relevant industry standards and bodies
- Automotive workshop service management training and support
- Discount package with non-original spare parts manufacturers;
- Business management support and mentorship through Unemployed Graduate Scheme, or SEDA Business Advisors and/ or services business professionals.
Who can apply?
- An entity registered with CIPC as a legal entity including cooperatives;
- The business must 100% be owned by South African nationals;
- Employees must be 70% South Africans, and in the case of non-South African employees – they must hold valid work permits as determined by the Department of Home Affairs;
- The business must be operating in a township or village;
- The business must be registered or must apply for registration with SARS and UIF; and
- The business must have a valid business bank account or willing to open a business account.
SEDA offices will also be available to assist entrepreneurs to register with CIPC and SARS at the cost of the applicant and also assist with municipal business licensing, in the event municipalities are not responsive.
Application forms for these three schemes will be available online on https://smmesa.gov.za/ from Wednesday, 27 May 2020.