Cape Town - It is positive to have a consistent theme of support for small and medium enterprises (SMEs) in both the recent State of the Nation Address and in Budget 2018, according to Ben Bierman, managing director of Business Partners Limited.
To him that is proof of government being serious about the growth and well-being of SMEs in South Africa.
“Highlighting this is government’s commitment to the preferential procurement regulations, as well as the fact that the Public Procurement Bill will be submitted to Cabinet in March 2018 for gazetting for public comments," said Bierman.
"These regulations will ensure that SMEs are able to participate fairly in the public procurement process, which will in turn promote black economic empowerment, industrialisation and allow SMEs to create more job opportunities."
In his view, it is also key to note that a directive will be issued to all government departments and public institutions next week, instructing them to pay suppliers on time or be charged with financial misconduct.
"This is crucial to the survival of a small business as late payment has a direct impact on a business’ cash flow and the speed of its cash conversion cycle, which ultimately impacts its overall profitability,” said Bierman.
He added that the announcement of the revised Financial Sector Codes and the Black Business Growth Fund created through the code will have a significant impact on black businesses growth.
“This initiative is expected to dramatically improve access to funding for black-owned businesses which previously may have had difficulty to obtain this kind of funding. We are confident that the initiative will impact transformation and look forward to witnessing its implementation,” said Bierman.
Commenting on provisional allocation of R2.1bn to the SME Incubation Fund announced in the mini budget, Bierman pointed out that although this is a positive initiative, it is disappointing that it will only begin operating in 2019/20, as SMEs need support now more than ever.
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER