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DEPARTMENT OF SMALL BUSINESS DEVELOPMENT. PRESENTATION OF THE QUARTER ONE PERFORMANCE FOR 2015/16 FINANCIAL YEAR. Outline. Background and Purpose Executive Summary 3 . Quarterly performance information - Department of small business development (DSBD)
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DEPARTMENT OF SMALL BUSINESS DEVELOPMENT PRESENTATION OF THE QUARTER ONE PERFORMANCE FOR 2015/16 FINANCIAL YEAR
Outline • Background and Purpose • Executive Summary 3. Quarterly performance information - Department of small business development (DSBD) - Small Enterprise Development Agency ( seda) - Small Enterprise Finance Agency (sefa) - South African Women Entrepreneur’s Network ( SAWEN) 4. Challenges 5. Concluding Remarks 6. Recommendations
Background and Purpose • Purpose of the tabling performance report is to give an overview of the activities of the department and its agencies for the first quarter of the current financial year ( 2015/16) in line with Treasury Regulations 26.1.1, 26.1.2 and 30.2.1 and the Public Finance Management Act 1 of 1999; • The report provides progress made on the implementation of set targets against outputs and reasons for variance as per the requirements contained in the DPME’s Framework for Strategic Plans and Annual Performance Plans; and • To present and request the Portfolio Committee to note the first quarter performance of the department and its agencies for the current financial year.
Executive summary Administration • The department recorded a higher vacancy rate in the period under review and this was largely attributed to the realignment exercise the department embarked upon to ensure the deployment of staff to the critical positions such as Finance and HR; • In relation to employment of people with disabilities and women at Senior Management level, the department met the set targets and exceeded performance in relation to representation of women at senior management level; • The department processed payments of approximately 1773 of eligible creditors within 30 days in the quarter against 1815 of the total invoices received. The variance of 42 was due to the increase in the number of invoices received towards the end of June but they were all paid on the 1st of July;
Executive summary Cont… Cooperatives • With regard to linkages and integration to market value chains 20 Cooperatives in Limpopo and KZN were identified to be assisted through the programme; • The department identified and initiated engagements with private sector companies that are in productive sectors of the economy to incubate cooperatives; and • Fewer number of cooperatives were supported through training and funding. This was as a result of the department’s decision to implement the cooperatives model that was approved by the PC;
Executive summary Cont… Enterprise Development • 373 informal traders were trained in four provinces, namely Free State, Eastern Cape, Mpumalanga and KZN; • Through the New Venture Creation programme; KZN recruited over 1000 candidates to participate in the programme; • 54 female owned entities were supported in the following provinces KwaZulu Natal, Limpopo, Gauteng , Mpumalanga and Eastern Cape; • Implementation of the 30% set-asides programme is on track, draft regulations were issued by the National Treasury for public comments and are scheduled to be signed off by the end of September 2015. • Under the Black Business Supplier Development Programme, 221 enterprises were supported to the tune of R60,7 million resulting in 7412 jobs supported of which 6321 are permanent and 1091 are temporary Budget trends Expenditure as at 30 June 2015, R220.2 million of the allocated budget of R1 103.1 billion. The year-to-date projection was R311 million resulting in an under expenditure of R90.8 million.
Executive summary Cont… Enterprise Development • The total of 2,174 Clients against the target of 2,553 received Seda support; • 70% of surveyed clients indicated an increase in turnover; • 45% of surveyed clients indicated an increase in the number of people employed; • 98% of satisfaction level from Seda supported clients Cooperatives - 20 Primary cooperatives established and supported; - 13 Secondary cooperatives were supported; - 13 One Municipality/ Village One Product (OMOP) programmes initiated
Executive summary Cont… Seda Technology Programme (STP) • 2,236 clients are supported by the Seda network of 48 incubators • 535 permanent jobs were created by incubated small enterprises, mostly in agriculture and construction sector . Budget Trends Expenditure as at 30 June 2015, R144 443 million of the allocated budget of R610 364 million. The year-to-date projection was R196 500 million resulting in an under expenditure of R52. 057 million
Executive summary Cont… • Facilitating Access to Finance for SMMEs and Co-operatives • - Through the loan funding intervention, 24 568 SMMEs and Co-operative Enterprises supported comprising of the following targeted groups • 5305 youth owned enterprises • 22 296 black –owned enterprises • 22 620 women owned enterprises • 22781 SMMEs and Co-operatives located in priority provinces. • 43% of the loan financing approved was to SMMEs located in priority economic • sectors • 78 % of the quarterly targets were met (21 out 27 performance indicators) • Budget Trends • Expenditure as at 30 June 2015, R46 646 million of the allocated budget of R320 039 million. The year-to-date projection was R47 929 million resulting in an under expenditure of R1. 3 million. During the quarter under review, sefa approved R204 million and disbursed R344 million of loan financing to SMMEs and Co-operatives.
Performance against the Seda APP Overview • Operational plans finalised for the year. • Audit of financial statements and performance information by the Auditor-General conducted. • Out of a total 26 indicators with targets for the quarter, performance was achieved on 14 indicators. • Challenges were experienced due to a higher than anticipated resignation of Business Advisors. This is being addressed by recruitment and capacity building.
Performance against the Seda APP • Narrative: • Number of clients working correlates to the number of branches and number of Business Advisors. • The effect of the resignations of Business Advisors in Limpopo, Mpumalanga and Gauteng can be seen in the performance of these three provinces. • Western Cape has benefitted from the expanded network brought about by the incorporation of the Red Door programme.
Performance against the Seda APP Out of the 2,174 clients working with: • 93% are black owned businesses. • 49% are female owned businesses. • 40% are youth owned businesses. • 1% are owned by people with disabilities. • Narrative: • Seda hosts events, in partnership with various stakeholders, the seek to create a client portfolio that matches the demographics of the particular area. These events, with a focus on a particular demographic, are usually run in alignment with other priority programmes, for example youth focus in June.
Performance against the Seda APP • Narrative: • Four provinces, namely Eastern Cape, KwaZulu Natal, Mpumalanga and North West contributing largely in this regard. These are provinces with a notable manufacturing sector, in area such as Uitenhage, Richards Bay, Witbank/Middelburg and Brits. • Going forward, Seda will make efforts to increase and spread the profile across all provinces, as these are the clients that are in a position to benefit from market access partnerships.
Narrative: • Performance of agriculture linked to the seasonality of the sector. The performance of the construction incubator can be attributed to the model which also includes securing contracts for the incubated small enterprises. • Some incubators have also taken on a new group of incubatees, and the jobs are expected to be created during the second and third years of incubation.
Narrative: • There is a positive correlation between the number of clients supported and number of jobs created per sector. • What is worth noting is the cost to support a client, which tends to be lower in sectors such as agriculture and agro processing.
