Foreign donors invest R43,5 million in SA Small Businesses

South African business plans has become extremely popular amongst foreign investors in recent months. In addition to the article in the South African Venture Capital blog which earlier reposrted a boost from foreign Venture Capital funds investing in SA Small businesses. Small businesses with viable business plans in South Africa has already gained more than R43,5 million from foreign donors according to the South African Times


South African small businesses competed against other emerging countries for foreign investment, with foreign donors investing R43,5 million in the country's small businesses this year, an increase of 89 percent from last year, the Small Enterprise Development Agency said on Wednesday. 

The agency said this increase was due to its improved financial management and stable leadership, adding it also meant there was confidence in the agency's role to develop and support small enterprises, chairman Linda Mngomezulu said at its annual stakeholders' meeting. 

The Global Entrepreneurship Monitor report published in May showed that one in eight people started a business in emerging nations such as India, Chile and Brazil, whereas in SA the figure was one in 13 
While the agency could not identify the foreign investors that were supporting local small businesses, SAB Miller, Sasol and Bidvest were examples of local companies which had put significant funds into training programmes and enterprise development. 

Mngomezulu said the agency would 'further roll out plans' to make it a 'centre of excellence for business development'. 

However, according to a survey released by Finscope earlier this month, the growth of small businesses is still slow in SA, with only four percent of entrepreneurs aware of the services offered by the agency. 

Agency CEO Hlonela Lupuwana said the organisation would respond to these challenges by 'strengthening partnerships with provincial and local government agencies and developing a client journey model which prioritises interventions in small businesses'. 

The agency's l earning academy trained 750 people this year, with 70 percent of those starting their own businesses, she said. 

Lupuwana said, however, that the agency did not want to focus only on the number of businesses assisted, but also on producing quality businesses that would have a real effect on economic growth. 

The global economic crisis had proved 'devastating to the vulnerable small enterprise community' but it was at such times that the value of the agency ' was best revealed as creating an environment which prevented the recession from dampening the country's entrepreneurial spirit'. 

She acknowledged that the agency needed to raise awareness about its services. Consequently, the agency intended to develop high-profile visible projects, hire more staff at branches around the country and bump up delivery of its products and services.


SEDA who on a regular basis fund a wide range of business plans and ideas in SA is encouraged by the support from foreign investors.

Supporting more than 14 000 small businesses

Latest figures suggest that various government incentives with services like business finance and business plan support have helped over 14 000 small firms in the last 12 months alone. SEDA, with the help of well chosen alliances such as SA Business Plans and the South African Investors Network is delivering on its promise of supporting the economy of South Africa through helping small business owners everywhere.

A recent article on the SouthAfrica.info website explains:

South Africa's Small Enterprise Development Agency helped over 14 000 clients with services ranging from business planning and registrations to cooperatives support and access to markets in 2008/09.

In all, 199 830 potential and existing small businesses accessed the agency's services through its 42 branches countrywide, an increase of 7.3% over the previous year.

Briefing a National Council of Provinces committee in Cape Town this week, Seda CEO Hlonela Lupuwana said that out of those, 46 695 clients' needs were assessed and 14 373 were helped.

The Seda technology programme assisted 835 small businesses with a total turnover of R129-million, through its network of 27 incubators, and also helped to create 224 new small enterprises, Lupuwana said.

Its Community Private Public Partnership programme, which offers support to co-operatives and community-owned projects, has also been revived.

In-house advisors
Seda had decided to limit the use of consultants to the supply of more technical services, and to 20% of all services offered by Seda, with the remainder being offered by in-house advisors, Lupuwana said.

Last week, a group of 25 Seda business advisers embarked on a seven-day visit to Taiwan, where they were expected to gather more diagnostic skills and training on helping business owners.

Another group of 25 advisers were expected to visit Brazil later this year, Lupuwana said, adding that the visits were a cost-effective way of supporting advisers as Seda only had to pay for "minor expenses".

Forging partnerships
Lupuwana said a random survey of 902 clients had shown that 80% of clients found that Seda's assistance had a positive effect on their business.

This support had come amid limited resources, and despite a six-month moratorium on the provision of all services by the agency to small enterprises.

The limited budget – the agency received R331.2-million for 2009/10 – was a "major problem" in terms of meeting the agency's targets.

Lupuwana said the key to widening the agency's support on a limited budget would be the partnerships it could forge with key partners such as provincial and local governments.

In the Eastern Cape, for example, a number of municipalities had donated buildings and paid for rent so that Seda centres could be set up there.

Source: BuaNews