SMMEs battle in agric, manufacturing- LEA
Tsaone Basimanebotlhe | Thursday December 4, 2014 11:24
In a statement accompanying the Authority’s latest Annual Report, LEA CEO, Tebogo Matome said the majority of the organisation’s clientele was in the two sectors and was performing poorly.
“It is therefore correct to conclude that the prevailing business environment is more restrictive to start-up and growth of SMMEs in these sectors,” he said.
“The African Development Bank has estimated our 2013 economic growth at 5.1 percent (and) while this indicates progress towards recovery, it is important to note that this recovery is fuelled by service-oriented sectors.
“This contrasts sharply with our current SMMEs clientele, where the majority are in agriculture and manufacturing,” he said.
In the report, LEA notes the growth of new enterprises is hindered by access to serviced land, operating space, costs of water surveys and Environmental Impact Assessments. In addition, financial institutions are still unwilling to fund SMMEs, “resulting in stagnant business conversion rates”.
Matome noted the slow pace of weaning clients off LEA support during the 2013/14 financial year.
“We had a target of graduating 34 clients, however only three have been able to graduate from LEA services,” he said.
“Even though the performance is not satisfactory we are however mindful that our inability to graduate clients is more an indication of a lack of entrepreneurial culture in the country and a harsh environment which militate against the start-up and growth of our SMME sector clientele.”
The CEO however, noted an improved performance by SMMEs between January and March 2014, the last quarter of the Authority’s financial year.
During this period, he said, LEA registered “significantly” improved performance by SMMEs as indicated by the number of registered clients, jobs created and the increase in their turnover.
He said LEA had carried out 11,721 “interventions” to boost SMMEs’ competitiveness, sustainability and growth in the 2013/14 financial year. These interventions include training, mentoring and coaching.
“Even though we are convinced of the efficacy of our interventions, as a learning organisation, we will continue to identify areas of improvement to ensure that we continue to add value to our SMMEs.”
The Authority finalised a regional competitiveness study validating a total of 37 business opportunities, with upstream and downstream value add, available for SMMEs across the country.
According to the annual report, the opportunities span across agriculture, manufacturing, tourism and the services sectors.
LEA was established a decade ago as a one-stop shop to provide support services to local SMMEs, encompassing training, mentoring, marketing and technology support for the product development.