Job Creators: Bridging the SMME funding gap

The Department of Small Business Development in South Africa is on a mission to support job creation and uplift marginalized communities by allocating up to R2.16 billion in the 2024-25 financial year. This funding aims to create over 130,000 jobs, focusing on empowering black-owned, women-owned, youth-owned, and businesses owned by persons with disabilities. To delve into how this strategy will be implemented, Andile Stemela, Divisional Executive Strategy Planning and Significant Investments at the National Empowerment Fund, joined CNBC Africa for an insightful discussion. Stemela highlighted the importance of effective execution and wise spending to achieve the targeted job numbers. He emphasized the agility and commitment of the National Empowerment Fund in deploying capital for small businesses in alignment with government strategies. Stemela also touched on the integration of efforts among different Development Finance Institutions (DFIs) to enhance support for SMEs and ensure complementary overlaps rather than redundant efforts. The conversation further explored the impact of the National Small Enterprise Amendment Bill on the regulatory space, stressing the need for decreased paperwork and streamlined processes while maintaining due diligence to safeguard public finances. Stemela underscored the significance of corporate partnerships in fostering SME growth, citing the Enterprise Supply Development pillar within the Triple PE Act as a key opportunity for enhancing collaboration. He highlighted the role of large businesses in sustaining smaller enterprises through efficient value chains and sustainable practices. Stemela discussed the sectors where SMEs thrive as key job creators, notably in community, social, and personal services, retail trade, and manufacturing. He emphasized the importance of creating more markets for SMEs to address youth unemployment and promote economic development. The conversation also delved into challenges faced by SMEs in sectors like agriculture and technology, citing access to debt and equity as critical barriers to growth. Stemela addressed the need for big businesses to invest in newer technologies and expand their capital base to stimulate job creation and drive economic growth. He highlighted the potential of regional partnerships, such as the African continental free trade area, to boost demand and encourage investment in fixed capital. The discussion concluded with a call for exploring value chain opportunities and fostering collaboration between government, DFIs, and financial institutions to support South African businesses in seizing emerging opportunities and expanding market reach.