SMME funding working in tandem with admin cost reductions, says Ndabeni

Minister of small business development Stella Ndabeni says as small businesses are beset with rising prices on all fronts, her department has worked with other government departments to buffer operating costs.

On Tuesday morning she tabled the department of small business development (DSBD) budget vote of R3.036bn, of which:

• R2.154bn is allocated towards transfers and subsidies;
• R277.1m to compensation of employees;
• R597.2m to goods and services; and
• R7.8m to capital expenditure.

She thanked the minister of finance, Enoch Godongwana, for raising the minimum value-added tax (VAT) threshold, saying this would go a long way towards easing the cost of doing business for micro, small, and medium enterprises (MSMEs).

“We commend the minister of finance for increasing the compulsory VAT registration threshold from R1m to R2.3m. This is a major victory for small businesses across the country. This will ease the cost of doing business for MSMEs, as continuously pushed by His Excellency President Cyril Ramaphosa,” she said.

The Small Enterprise Development and Finance Agency (Sedfa) will receive R1.899bn of the transfers and subsidies allocation. She said challenges such as unemployment, the cost of doing business and the influx of foreign-owned small businesses heightened the urgency for more jobs and a transformed, inclusive economy.

The minister said the DSBD was on track to meet its target of supporting 1-million MSMEs and co-operatives over the seventh administration.

Entrepreneurs play a critical role in South Africa’s townships and rural areas, despite the many constraints they face, including access to finance, security concerns, the lack of business infrastructure, and competition from illegal foreign-owned businesses and large retailers and supermarkets encroaching on local markets

—  Stella Ndabeni, small business development minister

“We are on track. During the past financial year we supported 288,123 MSMEs, with 117,134 enterprises receiving financial backing and 170,989 enterprises benefitting from non-financial intervention and development.”

She added that this year the department would increase its work rate on the legislative front and introduce a one-stop digital shop platform for business licensing.

“We will continue pushing for reforms on five of the 25 pieces of legislation we identified that place administrative burdens on MSMEs. We have finished consultations on the Business Licensing Bill and will soon bring this bill before parliament and the NCOP.

“While we wait for parliament to finalise the appointment of the Small Enterprise Ombuds, we have appointed minimum staff in the Ombuds Office and have established a complaint register.”

She said the department’s second budget priority for this year would be to continue to build the township and rural economy.

“Entrepreneurs play a critical role in South Africa’s townships and rural areas, despite the many constraints they face, including access to finance, security concerns, the lack of business infrastructure, and competition from illegal foreign-owned businesses and large retailers and supermarkets encroaching on local markets.”

She said the department aimed to provide further support for township and rural enterprises.

“We will also be scaling our offerings as the DSBD portfolio for township and rural enterprises, building on the successes of 2025/26, where we disbursed more than R829m to over 111,000 MSMEs through the Township and Rural Entrepreneurship Programme.”

She said during the past financial year, Sefda prioritised previously disadvantaged groups and underdeveloped areas, channelling:

• R2.3bn to black-owned enterprises;
• R1.2bn to rural enterprises;
• R1.2bn to women-led businesses;
• R501m to youth-owned businesses; and
• R383m to township economy revitalisation.

Business Times