Dep Minister pleased with govt-assisted businesses

Tuesday, February 3, 2009

Pretoria - The Deputy Minister of Trade and Industry, Elizabeth Thabethe has told the owner of a small linen and upholstery shop in Pretoria she was pleased with the way her business was growing after having received a kick-start grant of R300 000.

The department had given Thandi Lekhuleni the money to buy the necessary machines to start her business through its Co-operative Incentive Scheme (CIS), where the department provides 90 percent of the capital necessary to start a business while the entrepreneur needs only provide 10 percent.

"We are happy that we decided to fund this co-operative and we hope that your business will grow this year," said the deputy minister, during a visit to one of the CIS businesses to check on how it was doing.

Ms Lekhuleni told BuaNews that business had been running smoothly since opening in 2006, despite some rough patches. "We lack working finance and stock, and we also need finance to renovate and expand the business. Our biggest challenge is the working capital."

She said she had been trying to market the business in order to compete with other leading stores. All curtains, school uniforms and other products are made by five members of the co-operative and four casual staff.

Ms Thabethe said the CIS grant would provide businesses with the opportunity to graduate from the second or informal economy to the mainstream economy.

However, she warned that the success of the business depended on how it was run and how positive the staff remained. "The purpose of the scheme is to assist co-operatives like this one, which have potential to grow and create job opportunities for other people," Ms Thabethe said.

The deputy minister highlighted that the business owner must not rely on government grants alone to stay afloat, as South Africa was not a welfare state but a developmental state.

Chairperson of the CIS Adjudication Board Ruth Masoakane said she was proud of the way the business had developed since the money was handed over in April 2006.

The funds have helped the business to join the mainstream economy, Ms Masoakane said, adding that the scheme was initiated to uplift businesses that were operating under the radar.

Since November 2007 a total of 77 co-operatives have been given approval and subsequently funding to the tune of R13 million. R1.2 million has been paid out to help businesses to date, with 7.7 million still outstanding but due to be paid by March this year.

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