Why government input of finance for SME development is important. The BIG question: Why do SME in South Africa perform far below peers in the region on all indicators like sustainability, growth and jobs? All research etc agree that SME development is and integral part of economic development which is measured in the creation of wealth and jobs. And, has in many parts SME contributes to poverty alleviation. Why are we not seeing these trends in South Africa? The answer that emerges is that the South African government has not paid full attention to the SME resource as a means of economic development. Put simply the South African government has not invested enough human and Finacial capital in the development of SME. For SME to grow it needs the investment of the people of South Africa in themselves and one such vehicle of this investment is SME. The source of this investment is the tax payers’ money. The managers of the tax payers’ money, the elected government, have not responded accordingly. So while some good work is being by big business mentors and so on among isolated low risk patches of SME, the underlying climate for the growth of SME is flimsy and weak. Developing an appropriate climate for SME growth is primarily the role of government. Last count we have about 10 committees, 5 departments, 3 commissions, all having one Chief Director at the DTI coordinating it all. It appears that dealing with SME matters not directly but in an oblique sort of way…as a “by the way” concern of no real value. When government has done this on their own, we see the enormous losses (tax payers money) written off in IDC, NEF, NYDA, SEFA, Khula and so on. Again the investments have taken place in a policy environment not conducive to SME and also without private sector manager support. That is why South African Small and Medium Enterprises Federation (SASMEF) is calling for an economic Codesa to consider an SME development for South Africa that learns fro the Brazilian model called SEBRAE and which has been successful. SASMEF has with the University of Western Cape set the platform with the inauguration of the UWC Chancellor’s Round Table on Economic Development. WHY? SASMEF believes: “SME’s are the expression of free initiative, social inclusion and citizenship. Along these lines SME directly and indirectly influences the life of entrepreneurs, associates, employees, suppliers, family members and the entire social chain. SME’s are the democracy of opportunities”
Posted on: Thu, 19 Sep 2013 08:35:14 +0000
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