The Portfolio Committee on Small Business Development visited nine small, macro and medium enterprises (SMMEs) and cooperatives yesterday within the Mangaung Metropolitan Municipality in Free State. Kopanong Women Enterprise (KWE) cooperative in Thaba Nchu stood out of all cooperatives funded by the Department of Small Business Development thus far on the Committee’s oversight visit to the Free State.
The KWE is a tertiary cooperative with 25 members and 35 trainees who receive free lunch and stipend. All the cooperative members earn a fluctuating salary of around R2 000 per month. Chaired by Ms Phato Morwe who is also a founder member, the cooperative’s core business is to make clothes, in particular school uniforms.
“We get orders for school uniforms from other provinces, such as the Eastern Cape, Mpumalanga and Northern Cape. The Small Enterprise Finance Agency (Sefa) gave us an initial loan of R700 000, which we repaid fully with interest, but the processing of our second loan request for R900 000 is taking too long, impacting us on our bulk orders,” said Ms Morwe.
The cooperative is self-sustaining and enbables its members to pay the rent and security bills. It’s now in the process of securing funds of R30 million to diversify the business to include production of sanitary pads for women.
Ms Morwe said if they could secure funding, buying a building would be top priority, followed by procuring sewing machines. “According to our projections, we could multiply R30 million into ten folds and create more than 2 500 sustainable jobs,” she said.
Members of the Committee breathed a sigh of relieve, saying it was refreshing for them to see a self-sustainable cooperative that is able to pay salaries to its own members. “We will see what we can do to assist the cooperative to secure the required funding. It has always been our long-held view that Sefa and Department of Small Business Development should provide financial assistance as per the need of SMMEs and cooperatives, and not how they see fit,” said Ms Ruth Bengu, the Chairperson of the Committee.
Meawhile, the Committee was impressed by the type of service tailor-made for street vendors by Sefa at Mangaung Fresh Produce. There, Sefa has an integrated IT system with that of the fresh produce, whereby vendors are provided with loans directly into the account of the market.
“The street vendors do not have access to the traditional private banks and they depend solely on selling fruits and vegetables. The service offered by Sefa here is the first of its kind and commendable. Our only concern is the high interest rates charged on the loans,” said Ms Bengu.
Justice Molafo
16 August 2016
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