Pretoria: With South Africa's cooperatives performing at a level lower than what is expected when compared to other countries, the Minister of Small Business Development, Stella Ndabeni-Abrahams, has outlined interventions to enable cooperatives to thrive. These include providing financial support, cutting red tape, enabling access to markets, equipping cooperative members with necessary business acumen and skills, and making cooperatives more bankable.
According to South African Government News Agency, Ndabeni-Abrahams was addressing an International Day of Cooperatives event at Sun City Resort. She emphasized the need to cut red tape within the Small Enterprise Development and Finance Agency (SEDFA) to reduce turnaround times for support applications. The implementation of digital systems and new forms of credit ratings were highlighted as critical steps to facilitate easy registration, compliance, and access to various financial and non-financial support.
The Minister pointed out that South Africa has a highly concentrated economy with high barriers to entry for new entrants. Cooperation with public and private sectors is underway to create markets for small enterprises, including cooperatives. She noted that cooperatives do not sufficiently benefit from Enterprise Supplier Development in terms of localization opportunities within corporate and government supply chains. The anticipated gazetting of the Public Procurement Act regulations is expected to open new markets for cooperatives, promoting the use of technology for efficiency.
Ndabeni-Abrahams stressed the importance of preparing cooperatives to serve these markets by equipping members with necessary business skills. Government initiatives through SEDFA have established over 120 incubators and digital hubs aimed at supporting cooperatives. The emphasis on business acumen, innovation, and entrepreneurship is crucial as cooperatives compete with other private entities.
The Minister also addressed the need for cooperatives to be bankable, highlighting compliance and corporate governance as areas needing attention. The Co-operatives Development Support Programme now incorporates a strong business development component alongside financial support. This year, R61.368 million will be disbursed to cooperatives through SEDFA, with allocations specified for various provinces.
Ndabeni-Abrahams detailed additional financial support through SEDFA's Development Fund and Commercial Fund, with R792 million set for distribution this year, including the Township and Rural Entrepreneurship Programmes. Specific provincial allocations for 2025/26 were also outlined, targeting rural provinces like the Eastern Cape and Limpopo.
The Department of Small Business Development is advocating for a Fund of Funds through the Micro, Small, and Medium Enterprises (MSMEs) and Cooperatives Funding Policy. In collaboration with the Department of Trade, Industry and Competition, efforts are underway to leverage the R100 billion Transformation Fund for cooperative support. The Minister also discussed initiatives to develop a pipeline of capital-ready cooperatives and the scaling of cooperative banking through the Cooperative Banks Development Agency.