Seda Annual Report 2008/09 Presentation to Select Committee on Trade and International Relations 21 October 2009

Delegation details NameTitleContact Details Mr. L MngomezuluBoard Chairperson Ms. H LupuwanaChief Executive Officer Ms. H HogendoornChief Financial Officer Mr. S KuneneHOD: Provincial Affairs Mr. J RavjeeActing Executive Manager: STP Mr. L NjengeSenior Manager: Strategy and Organizational Performance Management

Acronyms  CEO – Chief Executive Officer  EIC – Enterprise Information Centre  ENE – Estimates of National Expenditure  GDP – Gross Domestic Product  MTEF- Mid Term Expenditure Framework  Seda – Small Enterprise Development Agency  SMME – Small Micro and Medium Enterprises  STP – Seda Technology Programme 3

PART A: Seda Overview 4

Contents  Background  Seda’s mandate  Mandate implications  Target market  Seda’s network  Human Resources  Seda’s key products and services 5

Background  Seda established in December 2004 through the National Small Business Amendment Act, Act 29 of 2004  Formed through the merger of Ntsika Enterprise Promotion Agency, the National Manufacturing Advisory Centres (NAMAC) as well as the Community Public Private Partnership Programme (CPPP).  Godisa Incubation Programme, Technology Transfer Programme, and the South African Quality Institute (SAQI) later incorporated as a ringfenced programme - Seda Technology Programme (STP) 6

Mandate  Implement national government small business strategy  Design and implement a standard and common national delivery network that must uniformly apply throughout the Republic in respect of small enterprise development  Integrate all government funded small enterprise support agencies across all tiers of government 7

Mandate Implications National accountability Shift from wholesale to retail model Increase the footprint nationally including rural communities Seda as national integrator across the 3 tiers of government Create a national credible brand Provide uniform quality products, services and standards Find win-win partnerships 8

20 % 80 % Potential entrepreneurs Target Market 9

Seda Network  National Office  8 Provincial Offices  42 branches  58 EICs  4 mobile units  21 co-location points at local municipalities  27 incubation centres under the STP 10

Seda Network Seda BranchesContracted EICs STP IncubatorsCo-locations at local municipalities Mobile Units Eastern Cape63530 Free State69032 Gauteng KwaZulu Natal65380 Limpopo56200 Mpumalanga Northern Cape57002 North West51100 Western Cape35200 TOTAL

Human Resources (as at 31 March 2009) LocationNumberPercentage of Total Staff National Office % Provincial and branches % STP254.5% TOTAL % 12

Seda’s Key Products and Services  Seda Business Talk and Start (for start up clients)  Entrepreneurship awareness events  Business start-up training  Franchise awareness  Business planning  Business registrations  Cooperative development  Seda Growth and Build (for operational businesses)  Access to local markets  Access to export opportunities  Access to technology  Access to finance  Sector programmes  Business mentoring  Hotline to assist with late payment of SMMEs 13

Seda’s Key Products and Services  Seda Technology Programme  Business Incubation  Technology transfer  Product quality and certification  Technology for women in business 14

 PART B: Seda 2008/09 Annual Report 15

Contents  Contextual considerations  Performance Highlights  Sustainability and Impact Survey  Seda and STP Vote 32 funding  Future plans 16

Contextual Considerations  Moratorium for half of the year  Organizational restructuring and impact on performance  Economic crisis impact on small business environment  2008/09 period is first year of a longer term organizational reengineering process 17

Performance Highlights  Leadership  Appointment of CEO  Appointment of additional board members  Appointment of Executive Management  Financial Management  Implementation of Financial Management Improvement Plan  Unqualified audit 18

Performance Highlights  Improved service provision  Repackaging of Seda programmes, products and services  Partnerships with UNIZO (Belgium), SEBRAE (Brazil), NSIC (India), Technonet Africa and TradePoint programme  Focus on performance  534 staff members at end March 2009 (75% in the delivery network)  Implementation of performance management system 19

Performance Highlights  Service provision to SMMEs  199,830 potential and existing small businesses accessed Seda’s network (7.3% increase from 2007/08)  46,695 client needs assessed; 14,373 clients assisted  Main interventions: business planning, business registrations, cooperative support, access to markets  Progress on national programmes adversely affected by financial constraints  Community Private Public Partnership (CPPP) programme revived 20

Provincial Analysis – key indicators 21

Provincial Analysis – key indicators 22

Provincial Analysis – key indicators 23

Provincial Breakdown – Key Services ECFSGTKZNLMPMPUNCNWWCTOTAL Business Registration14.2%6.0%0.0%32.3%13.3%16.9%7.8%4.6%5.0%5643 Busines Plans10.0%7.9%10.9%24.7%9.7%11.1%8.5%9.8%7.3%1638 Access to markets12.6%7.4%10.5%16.2%14.0%16.4%5.5%6.0%11.4%2502 Cooperative support10.3%1.0%0.0%11.6%37.0%21.6%12.4%6.2%0.0%730 24

Highlights  Seda technology programme  Two new incubators established  835 clients supported  224 new SMMEs created  1,318 direct jobs; 5,461 indirect jobs created  Total turnover of assisted SMMEs – R129M 25

Sustainability and Impact Survey Survey Methodology: Independent service provider randomly selected 902 clients, approximately 100 per province, from population of 20,000 clients. Survey Results: Seda’s focus on new start-ups is clear – 40% of Seda’s clients have never been operational; Seda’s service offering focuses on business registrations; For 80% of operational clients, Seda has had a positive impact on their business, especially in the area of staff turn-over, sales and customers; Seda had the most impact when a variety of services were provided especially when offering training & mentoring and tender advice; and 59% of Seda’s clients are sustainable; 41% are vulnerable (need more customers & cash flow). 26

Vote 32: Seda & Stp funding 2008/92009/102010/112011/12 R'000 Seda 408, , , ,668 STP 76,739 68,320 76, ,535 TOTAL 484, , , ,203 27

Future Plans  Improved use of client feedback to improve service offerings  Measurement of client performance in terms of graduation, growth and sustainability  Establishment of Seda Learning Academy  Increased outreach and partnerships  Integrated monitoring and evaluation system development  Support systems improvement and development  Pro-active communication strategy  Revenue = R559.4M (R384.8M for 2007/08)  External earnings = R61.7M (R28.5M for 2007/08) 28

Thank you 29

Provincial Analysis – Absolute numbers ECFSGTGKZNLPMPNCNWWC Client walk- ins 27,61724,5599,49238,28719,32419,30313,94828,57618,744 Clients registered 5,3145,8882,04511,0955,7275,1602,3394,7444,833 Clients working with 2,0651, ,7802,5311, ,997 Business registration s , Business Plans Access to markets Coop support