Department of Small Business

Department of Small Business Incentive and Grants DSBD Overview Incentives Plan 2016/17

Structure of the Presentation Introduction Incentives Programmes Informal and Micro Enterprise Development Program (IMEDP) Share Economic Infrastructure Facility (SEIF) Emerging Enterprise Development Program (EEDP) Black Business Supplier Development Program (BBSDP) Cooperative Incentive Program (CIS) SMCIS

Introduction- About the Incentives Implement incentives that support employment creation and support National Priorities Achieve an improved customer satisfaction Design and Implement Incentives programmes that support sustainability of SMME and Cooperative, competitiveness, job creation and equity Provide Post investment Support Build a strong organisational capability Build strategic business linkages that ensure mutually beneficial partnerships

Introduction Rationale for : Co-operatives Vision & Mission Development Incentives Vision & Mission: To administers a set of incentive and grants instruments which are meant to stimulate and facilitate the development of sustainable, competitive enterprises through the efficient provision of effective and accessible incentive measures that support national priorities

Rationale for Co-operatives Development Introduction : Incentives Structured Methodology BBSDP EEDP & CIS CIS, EEDP, SEIF IMEDP Incentives Programs Target Market is in accordance to the Categories of SMMEs as defined in the National Small Business Act 1993 are typical classified as Very small, Micro, Small and Medium Enterprise.

Rationale INFORMAL for Co-operatives AND MICRO ENTEPRISE Development DEVELOPMENT PROGRAM (IMEDP) PROGRAM OBJECTIVE to provide developmental support to informal and micro businesses that are operating under depressed areas and owned by historically disadvantaged individuals aims to develop and strengthen their capacity to be sustainable through the provision of access to information, business development support services (including skills and mentorship), business infrastructure and working Capital; to facilitate the formalisation of Informal enterprises as means of entering the economic mainstream

Rationale INFORMAL AND for MICRO Co-operatives ENTEPRISE Development DEVELOPMENT PROGRAM (IMEDP) IMEDP OFFERING Eligible Informal Enterprises can receive an incentive grant value up to R60 000 Qualifying Interventions Includes tools, machinery equipment and; business development and training interventions,working capital etc QUALIFYING CRITERIA 100% black-owned Informal business. Turnover of between R 12 000 to R 200 000 per annum Operating or trading for at more than one year. If operating for less than a year but has a valid tender or contract are considered Be registered either SARS- Valid TCC and or VAT and or municipality of residence (permits) and or Affiliating to a recognisable Chamber or Body ;

Rationale INFORMAL AND for MICRO Co-operatives ENTEPRISE Development DEVELOPMENT PROGRAM (IMEDP) ACCESSING IMEDP We plan in engage our sister Agencies to be access points for the Informal Businesses IMEDP STATUS Being developed and should be available in 2 nd quarter 2015/16 Financial Year

Rationale for Co-operatives Development Shared Economic Infrastructure Facility (SEIF) PROGRAM OBJECTIVES Aimed at supporting enterprises by stimulating and encouraging Public and or Private sector investment through efforts of lowering infrastructure costs. To leverage public sector investment or private sectors that would provide necessary infrastructure by: creating an enabling environment for businesses to crowd-in investment mostly in townships, Rural areas and the inner city where business activity is taking place PROGRAM OFFERING Is a 50:50 cost-sharing grant made available on a reimbursable basis, where the dsbd makes a contribution of 50% towards the qualifying infrastructure project upon the completion of agreed milestones. The programme is capped at a maximum grant of R5 million (VAT inclusive) per qualifying applicant.

Rationale for Co-operatives Development EMERGING ENTEPRISE DEVELOPMENT PROGRAM (EEDP) PROGRAM OBJECTIVE To provide support to enterprises owned and managed by Women, Youth and/or People with Disabilities in order to increase their capacity to access economic opportunities and enhance competitiveness They are prioritised and supported to enable their meaningful participation and contribution the economy through to employment creation, poverty reduction and reduced inequality. aims to develop and strengthen their capacity to be sustainable through the provision of access to information, business development support services (including skills and mentorship), business infrastructure and working Capital;

Rationale EMERGING ENTEPRISE for Co-operatives DEVELOPMENT Development PROGRAM (EEDP) EEDP OFFERING Eligible can receive an incentive grant value up to R200 000 The grant may be used to acquire qualifying machinery, equipment and tools. (Specialised tools),raw materials and commercial vehicles Cost Sharing Structure EEDP is a 80:20 % or 40%: 60% cost sharing grant Machinery, equipment, raw material and tools is 80:20. Commercial vehicles is 40:60 of the approved costs of the vehicle vehicles A commercial vehicle is defined as a motor vehicle that is used for commercial purposes linked to the production process or service (project) applied for. These are vehicles used for the purpose of collection, delivery and distribution of goods. Any motor vehicle, of a kind normally used on public roads that have two or more wheels and that are constructed or adapted wholly or mainly for the carriage of persons (this includes sedans and double-cab vehicles etc.) are excluded

Rationale EMERGING ENTEPRISE for Co-operatives DEVELOPMENT Development PROGRAM (EEDP) QUALIFYING CRITERIA 100% ownership and control of the applying enterprise is Youth / Women and People with Disabilities. In case where a partnership is entered into, then of which 51 % or more ownership interest is held Youth/ women Minimum turnover R60 000 and Max R500 000 per annum; Operating or trading for at more than one year. If operating for less than a year but has a valid tender or contract are considered Be registered SARS- Valid TCC and or VAT a

Rationale EMERGING ENTEPRISE for Co-operatives DEVELOPMENT Development PROGRAM (EEDP) QUALIFYING INTERVENTIONS Machinery and equipment, tools. Specialized tools; Inputs/Raw materials; will be limited to 20 % of the total qualifying costs. In cases where the input/ raw material is the only cost item, the will be capped at twenty five thousand rand (R 25 000) per qualifying applicant. Commercial Vehicles - the eligible commercial vehicle should be directly linked to the core functions of the applicant. Specialised tools refers to trade related computer aided software s such as CAD (computer-aided design) software is used by architects, engineers, drafters, artists, and others to create precision drawings or technical illustrations and others mechanical computer-aided typically taught to use highly sophisticated software to design things like circuit boards, engine parts, automobiles, satellites and buildings. Raw material refers to basic material (in the form of inputs) from which goods and products are made or material that can be processed or manufactured into a final form e.g. wood, beats, leather skin etc.

Rationale EMERGING for ENTEPRISE Co-operatives DEVELOPMENT Development PROGRAM (EEDP) ACCESSING EEDP Engagement with DSBD Agencies to be access point for the program IMEDP STATUS Submission for Final Approval of the Guidelines Forwarded to Approval and should be ready and available in 2 nd quarter 2015/16 Financial Year August 2015

Cooperative Rationale for Incentive Co-operatives Program Development PROGRAM OBJECTIVE To improve the viability and competitiveness of a co-operatives by lowering the cost of doing business. To assist the co-operatives to acquire their start up requirement. To build an Initial asset base for emerging co-operatives to enable them to leverage other support. ELIGIBLE CRITERIA Incorporated and registered in South Africa in terms of the Cooperatives Act of 1999. Emerging co-operatives with a majority black ownership. Have projects in any of the different economic sectors. Adhere to co-operative principles (have at least five members: Be owned by a historically disadvantaged individual (HDI). Be rural or semi-urban based. Promote the involvement of women, youth and people with disabilities.

Cooperative Rationale for Incentive Co-operatives Program Development ELIGIBLE GRANT Qualifying enterprises are eligìble to receive a maximum of up to R350 grant Cost Structure is as follows: Matching Grant = 100% Maximum Grant R 350 000 Minimum Grant R10 000 ELIGIBLE PROJECTS Business Development Services Feasibility Studies /Market Research Production Efficiency Technological Improvement Projects Plant and Machinery: 60% Start-up requirement (discretion of AC) Working Capital (Opening stock-start ups): 40%

Cooperative Rationale Incentive for Co-operatives Program Development Non Eligible Projects Activities already funded by other government or parastatals Costs associated with tendering and tendering documentation Cost of Acquiring a building Costs of rental and staff payments Any other cost (s) that the Adjudication Committee, in its sole discretion, deems as non-qualifying.

Cooperative Rationale Incentive for Co-operatives Program Development Application Process Proof of Registration Proof of decision to apply for funding Registration Certificate Business Plan Three Competing Quotes Copy of Constitution Valid Tax Certificate CV s and Certified ID s for the members ACCESSING CIS Agencies of the Department SEDA and Sefa.

Rationale for Co-operatives Development Black Business Supplier Development Program (BBSDP) BRIEF BACKGROUND ABOUT BBSDP The current BBSDP was relaunched in 2010 in order to address the constraints that many black-owned small enterprises faced in pa

Rationale for Co-operatives Development Black Business Supplier Development Program (BBSDP) BBSDP OBJECTIVE To fast-track existing SMMEs that exhibit good potential for growth into the mainstream economy. To grow black-owned enterprises by fostering linkages between black SMMEs, corporate and public sector enterprises. To complement current affirmative procurement and outsourcing initiatives of corporate and public enterprises. To enhance the capacity of grant recipient enterprises to successfully compete for corporate and public sector tenders and outsourcing opportunities.

Rationale for Co-operatives Development Black Business Supplier Development Program (BBSDP) BBSDP OFFERING Eligible Enterprises can receive an incentive grant value up to R1 million The program provides grants to a maximum of R800 000 for tools, machinery and equipment and; R200 000 for business development and training interventions per eligible enterprise.

Rationale for Co-operatives Development Black Business Supplier Development Program (BBSDP) COST SHARING STRUCTURE For Tools, Machinery and Equipments, the BBSDP will offer a cost-sharing grant of 50%,and approved enterprises will contribute 50% of the necessary costs (for business development services and training). For Enterprise Support Services interventions, the BBSDP will offer a cost-sharing grant of 80% of the approved costs of qualifying interventions, and approved enterprises will contribute 20% of the necessary costs (for business development services and training).

Rationale for Co-operatives Development Black Business Supplier Development Program (BBSDP) QUALIFYING CRITERIA Predominantly black-owned (51%). Have a predominantly black management team (50%). R250 000 to R35million annual turnover. Operating or trading for at least one year. If operating for less than a year but has a valid tender or contract are considered

Contact Details the dti Campus 77 Meintjies Street, Sunnyside Pretoria Postal Address: Private Bag X672 Pretoria 0001 Contact Numbers: Customer Call Centre: 0861 843 384 (select Option 2) sbdinfo@dsbd.gov.za

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