Briefing by the Small Enterprise

Development Agency (Seda) to the

Portfolio Committee on Small Business

Development

10 September 2014

Sipho Zikode, CEO (Acting)

Delegation Details.

Acronyms.

Legislative Framework Governing Seda.

Context to SMME Policy Framework.

SMME Policy Framework.

Vision and Mission.

Seda’s Strategic Objectives.

Seda’s Target Market.

Products and Services.

Seda’s Operating Model.

Seda’s Delivery Network.

Seda’s Staff Complement.

Revenue and Expenditure (in Millions).

Seda’s Budget per Economic Classification.

Performance on Strategic Indicators.

Presentation Outline 1

Delegation Details

2

Name Designation

Mr. Sipho Zikode Chief Executive Officer (Acting)

Mr. Lusapho Njenge Chief Strategy and Information Officer

Acronyms

CPPP Community Public Private Partnership

dsbd Department of Small Business Development

dti Department of Trade and Industry

Namac National Manufacturing Advisory Centre

SAQI South African Quality Institute

Seda Small Enterprise Development Agency

SMME Small Medium and Micro Enterprise

Stp Seda Technology Programme

TWIB Technology for Women in Business

CRM Customer Relationship Management

3

Legislative Framework Governing Seda

Seda was established in December 2004 through the National Small

Business Amendment Act, 29 0f 2004, under the dti, and now under

the dsbd through a merger of various institutions and programmes

such as Ntsika, NAMAC, CPPP, SAQI, Godisa and the technology

related activities of TWIB.

Seda’s mandate is to:

Implement national government’s small business strategy.

Design and implement a standard and common national delivery

network that must uniformly apply throughout the Republic in

respect of small enterprise development.

Integrate all government funded small enterprise support agencies

across all tiers of government.

4

When South Africa achieved democracy in 1994, it inherited an

economy with inter alia the following characters:-

A racialised economy dominated by monopolies;

A closed economy;

An economy based on exclusion, with the majority of citizens

having been excluded from participating; and

High unemployment and underemployment.

There was no comprehensive policy and strategy on small business

development.

As a response, a White Paper on National Strategy on the

Development of Small Business (The White Paper) in South Africa

was published in 1995, so as to foster small business development.

Context to SMME Policy Framework 5

The White Paper provided for the following measures:-

The creation of an enabling Legal Framework and Streamlined

regulatory conditions;

Facilitation of access to information, finance, procurement,

and market access;

Facilitation of access to affordable physical infrastructure and

other business development services;

Facilitation of access to appropriate technologies; and

Introducing differential taxation and other business

development and financial incentives.

The above continues to be given effect through a combination of

Policy Formulation, Programme Development and an Institutional

Framework for Small Business Development.

Context to SMME Policy Framework 6

Amongst the key Policies formulated was the National Small

Business Act of 1996 which was amended in 2004.

The above Act inter alia established Seda and the mandate to

provide coordinated services, programmes and products to

enhance competitiveness and capabilities of small enterprises.

The Integrated Strategy on the Promotion of Entrepreneurship and

Small Enterprises (ISPESE) was published in 2005.

This Strategy is aimed at strengthening the SMME sector

through promoting entrepreneurship, strengthening the

enabling environment and enhancing competitiveness and

capabilities at enterprise level.

Context to SMME Policy Framework 7

SMME Policy Framework 8

Vision – To be the centre of excellence for small enterprise

development in South Africa

Mission – To develop, support and promote small

enterprises to ensure their growth and sustainability in

coordination and partnership with other role players

Values – Nurture, Innovation, Customer Service Excellence,

Ethical Behaviour, Resilience (NICER)

Goal – Ensure that the small enterprise sector grows and

increases its contribution to sustainable and equitable

social and economic development, employment and wealth

creation

9 Vision and Mission of the Organisation

Strategic Objective 1:

Enhance competitiveness and capabilities of small enterprises

through coordinated services, programmes and projects.

Strategic Objective 2:

Ensure equitable access to business support services.

Strategic Objective 3:

Strengthen the organization to deliver on its mission.

Seda’s Strategic Objectives 10

Small enterprises

Micro enterprises

Survivalist enterprises

•Less than 200 employees

•Developed technical & business skills

•Less than 50 employees

•Developed technical/limited business skills

•Less than 20 employees

•Limited technical and business skills

•Less than 5 employees

•Very limited technical and business skills

Opportunity-driven/

Entrepreneurial

Necessity-driven/

Survival

Medium

enterprises

Small enterprises

Very Small enterprises

Micro enterprises

Characteristics

Potential entrepreneurs

All potential and existing small enterprises as defined by the

National Small Business Amendment Act, 29 of 2004.

Seda’s Target Market 11

For survivalist and micro enterprises

Entrepreneurship awareness Franchise awareness

Business start-up training Business planning

Business registrations Business start-up advice

For small and medium enterprises

Access to local markets Access to export opportunities

Incubation Access to technology

Quality and standards testing, advice and

implementation

Hotline to assist with late payment of SMMEs

Business mentoring Facilitation of access to finance

For collectively owned enterprises

Social facilitation and mobilisation Cooperatives development and registration

Access to local markets All other relevant products and services still apply

For people with disabilities

Programmes with MODE, DeafSA and SANCB All other relevant products and services still apply

Seda’s Service Offerings 12

Build Grow

Operational

Phase

Research and idea

generation Phase

Planning and

Formalisation Phase

Start Talk Meet

Partner

Network

Seda

Network

Clie

nts

Clie

nts

Clie

nts

Clie

nts

Clie

nts

Seda CRM

Seda Tools

Seda Learning Academy

Seda SMART System

Su

pp

ort

Pro

ce

ss

es

Seda’s Operating Model 13

Seda Provincial Network

Province Seda

Branches

Seda

Satellite

Offices

Seda

Supported

Incubators

Co-

location

Points

Mobile

Units

Info

Kiosks

EC 6 0 7 4 3 6

FS 5 2 1 0 5 3

GT 3 0 12 0 0 6

KZN 6 0 11 4 2 1

LP 5 0 2 4 3 1

MPU 5 0 5 7 0 14

NC 5 0 1 5 2 3

NW 5 0 1 5 4 6

WC 3 12 3 0 0 10

TOTAL 43 14 43 29 19 50

14

Number of

Staff

Members

Contract

Staff

Number of

vacancies

Total

Posts

Vacancy

Rate as %

of Total

Posts

National

Office 128 9 47 182 25.8%

Provincial

Network 418 34 41 481 8.52%

Total 546 43 88 659 13.3%

Seda Staff Complement 15

Revenue and Expenditure (in Millions) 16

INCOME FY 13/14 (Audited) FY 14/15 FY 15/16 FY 16/17 FY 17/18

Seda - DTI from

MTEF budget

457,8

498,3

527,5

556,3

583,2

STP - DTI from

MTEF budget

119,2

126,4

132,2

138,3

146,1

External earnings

51,8

34,8

35,0

35,0

8,9

Other income

12,3

8,1

7,9

8,0

8,1

TOTAL INCOME

641,1

667,6

702,6

737,6

746,3

EXPENDITURE FY 13/14 (Audited) FY 14/15 FY 15/16 FY 16/17 FY 17/18

Compensation of

employees

224,2

257,2

275,2

294,4

315,1

Goods & Services

378,9

393,7

410,7

426,7

414,8

Depreciation

13,0

14,8

14,9

14,9

14,9

Interest

2,1

1,9

1,8

1,6

1,5

TOTAL

EXPENDITURE

618,2

667,6

702,6

737,6

746,3

Seda Budget per Economic Classification 17

More than 96% of assisted small enterprises have indicated satisfaction with

quality of Seda services over the past four years.

Approximately 36% of surveyed small enterprises reported an increase in

number of people employed and approximately 66% reported an increase in

turnover as a result of Seda interventions each year, over the past three

years.

Seda Technology Programme has created in excess of 10,300 direct jobs

over the past six years.

Seda currently has 43 operational partnerships across all three tiers of

government, the private sector, the public sector and international

organisations.

Facilitated the operationalisation of over 100 primary cooperatives and over

30 secondary cooperatives each year for the past three years.

SMME Payment Assistance Hotline has facilitated over R380 million in

payments since inception.

Performance on Strategic Indicators 18

91% 93%

97% 98% 97%

28%

37%

56%

63% 67%

16%

27%

32% 35%

40%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2009/2010 2010/2011 2011/2012 2012/2013 2013/2014

% of clients satisfied with quality of Seda services

% of surveyed clients whose turnover increased

% of surveyed clients whose number of employees increased

Performance on Strategic Indicators 19

1283

1479

1845

2282

1587 1620

893

1517

2301

2900

0

500

1000

1500

2000

2500

3000

3500

2009/2010 2010/2011 2011/2012 2012/2013 2013/2014

Number of clients supported - Incubation Programme Number of jobs created - Incubation Programme

Linear (Number of clients supported - Incubation Programme ) Linear (Number of jobs created - Incubation Programme )

Performance on Strategic Indicators 20

Thank you