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Cape Town - A new government agency to fund small businesses was launched in Cape Town on Monday.
The Small Enterprise Finance Agency (Sefa) would focus on small scale manufacturing, agro processing, services in infrastructure development, mining services, the green economy and tourism, said Economic Development Minister Ebrahim Patel.
It would be a wholly-owned entity of the Industrial Development Corporation (IDC).
"The rationale for the new agency is to tap into the resources of the IDC to provide a better service to small business," Patel said at Sefa's launch.
Sefa was formed from an merger of three public organisations, Kula Enterprises, the SA Microfinance Apex Fund and the IDC's Small Business Levy Book.
Patel said the new organisation would save at least R20 million a year in overhead costs caused by duplication of services by staff and offices.
He said the R20m would go to entrepreneurs "to finance energy and activity".
"Sefa will use all the channels, commercial banks, retail financial institutions and direct lending," Patel said.
He said one of its goals was for the IDC to include small businesses in the mega projects it financed.
"We want to break a pattern of high levels of concentration and exclusion found in many sectors of the economy," he said.
He said Sefa would work closely with the Small Enterprise Development Agency and Postbank, which had a network of offices around the country.
It would also work closely with private sector and commercial banks.
Sefa chair Sizeka Rensburg said there was still a need to deepen the financing of small business in South Africa.
"SMMEs hold potential for job creation, economic growth, innovation, inclusive economic development and improving the conditions of our people," she said.
"But most small businesses still find it difficult to access finances through banks and commercial financing institutions. Sometimes they are far too small to even get an audience with commercial banks. Sefa will pay attention to gaps in the market and will endeavour to close the gaps."
