During his inaugural State of the Nation address earlier this year, President Cyril Ramaphosa pledged that government would set aside R2.1 billion for a SMME and Innovation Fund.
During a budget vote yesterday, Small Business Development Minister Lindiwe Zulu revealed the department is finalising the fund.
“Time and time again these start-ups, young people, people living with disabilities and women, in particular, tell us of their frustrations with banks and development finance institutions (DFIs), who refuse to support them because they are perceived as high-risk ventures, irrespective of the brilliance of their proposals or demonstrable potential to succeed,” Zulu was quoted as saying by SANews.
“We are finalising the implementation modalities with National Treasury and the Department of Science and Technology and we are working towards announcing the operationalisation of the fund during the third quarter, with the first disbursements in 2019/20,” she added.
The minister says that the fund will build on best practices in the sector and funding will be directed toward innovative start-ups that have a reasonable chance of success.
In addition to the SMME and Innovation Fund, the department will also lead the rollout of the European Union’s Employment Promotion through SMMEs Support Programme for South Africa.
This programme will inject approximately R800 million into the SMME sector over the next five years.
Said Zulu of the EU’s programme, “In September 2018, we will announce the modalities of this fund. This fund represents a significant injection of resources, which we will deploy effectively to craft an alternative future for entrepreneurs and SMMEs in our country.”
[Image – CC 0 Pixabay]