23 Jul The National Small Enterprise Amendment Act Came Into Effect Today, And So What?
As with the Public Procurement Act, the National Small Enterprise Amendment Bill was signed into law by President Cyril Ramaphosa earlier today.
Is this new legislation going to make any difference in your life as a Black-owned MAC agency?
An overwhelming number of BANA members make between R1 to R5 million in annual billings, and they are thus regarded as SMME’s. Therefore, knowledge of the prescripts of this Act is relevant to many of the members, and all the other SMME businesses at large, that take the time to read this post.
Here are the 5 key points about the National Small Enterprise Amendment Act, with a focus on redressing inequalities that continue to stubbornly characterise the economy of South Africa:
- Establishment of the Small Enterprise Development Finance Agency (SEDFA)
- SEDFA will be established as a state-owned company to provide integrated financial and non-financial support to small enterprises, including cooperatives
- This consolidates the roles of the Small Enterprise Financing Agency (sefa), Cooperative Banks Development Agency (CBDA) and Small Enterprise Development Agency (Seda) into a single entity
- The purpose is to drive economic transformation and inclusive growth by ensuring customized support and greater access to finance for small, medium and micro enterprises (SMMEs)
- Enabling an Equitable Trading Environment
- The Act empowers the Minister to declare certain practices concerning small enterprises as prohibited unfair trading practices
- This aims to create a more level playing field and enable fair competition among small businesses, regardless of race or ethnicity
- Establishing an Office of the Small Enterprise Ombud Service to provide affordable and effective access to justice for small enterprises
- Promoting Non-Racial and Non-Discriminatory Principles
- The Act emphasizes the importance of enacting deracialized legislation and providing funding opportunities to small businesses
- This is critical to address concerns around equality of opportunity and contribute to the well-being of all South Africans
- Over 90% of registered enterprises in South Africa are small businesses, contributing significantly to GDP
- Reviewing the Definition of Small Enterprise
- The Act proposes amending the definition of small enterprise to allow for more appropriate policy and support interventions
- This includes cooperatives, which are an important part of the small business ecosystem
- A more accurate definition will enable better targeting of support to address economic inequalities
- Increasing Support for Small, Black-Owned Enterprises
- The Department of Small Business Development will continue to support small, black-owned enterprises through programs like the Black Business Supplier Development Programme
- This provides cost-sharing grants to help small, black-owned businesses acquire tools, machinery and other business development services
- Over the medium term, R813.8 million is allocated to this program to promote the growth of black-owned small enterprises
Point 4 above caught my attention. This is where BANA must get involved, in the interests of its members, by providing valuable input in the reviewing of the definition of Small Enterprise by the Minister.
In summary, the National Small Enterprise Amendment Act gives the Minister of Small Business Development more teeth to intervene where it is necessary. It also creates a channel – the Ombud – for SMME’s to assert their rights that are protected by this legislation.
The responsibility lies with all the SMME’s – including the Black-owned MAC agencies – to gain knowledge of this legislation and to use it to their advantage.
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