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PRESENTATION BY THAPELO MOKOENA – CEO/MD KATLEHO CHEMICALS DATE: 24/11/2010 RSA PARLIAMENT

This presentation discusses the challenges faced by SMEs in accessing funding and proposes solutions to overcome these barriers. It emphasizes the importance of government support in creating jobs and growing the economy.

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PRESENTATION BY THAPELO MOKOENA – CEO/MD KATLEHO CHEMICALS DATE: 24/11/2010 RSA PARLIAMENT

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  1. PRESENTATION BY THAPELO MOKOENA – CEO/MD KATLEHO CHEMICALSDATE: 24/11/2010RSA PARLIAMENT SME ACCESS TO FUNDING TO: HOUNARABLE MEMBERS OF PORTFOLIO COMMITTEE, ON ECOMOMIC DEVELOPMENT .

  2. SME ACCESS TO FUNDING CONT. • WE WOULD LIKE TO THANK THE HONOURABLE MADAM EM COLEMAN ,THE CHAIRPERSON : PORTFOLIO COMMITTEE AND ALL HONOURABLE MEMBERS FOR INVITING US TO DO SUBMISSIONS AND MAKING ORAL PRESENTATION. WE REALLY APPRECIATE THE OPPORTUNITY YOU OFFERED TO US .

  3. SME ACCESS TO FUNDING CONT. • OUR COMPANY HAS TWO FACTORIES (1)FREE STATE –QWAQWA (2)MPUMALANGA –KINROSS • OUR ORGANISATION MANUFACTURE CLEANING CHEMICALS I.E. HOUSEHOLD AND INDUSTRIAL CHEMIACALS .

  4. SME ACCESS TO FUNDING CONT. • OUR PLANT IS AUDITED FOR GOOD MANUFACTURING PRACTICE AUDIT-BASED ON SABS 049. • WE CURRENTLY SUPPLY ESKOM, STANDARD BANK ,GAUTENG SHARED SERVICES CENTRE(GAUTENG PROVINCIAL DEPARTMENTS).

  5. SME ACCESS TO FUNDING CONT. • WE SECURED THE LUCRATIVE CONTRACT TO SUPPLY PICK ’N PAY AND BOXER SUPERSTORES AND OTHER CASH AND CARRIES. • OUR BUSINESS HAS CREATED 35 JOBS AND HAS POTENTIAL TO CREATE + - 20 JOBS IN SHORT TERM.

  6. SME ACCESS TO FUNDING CONT. • WE APPROACHED MOST FUNDING INSTITUTIONS SUCH AS IDC ,NEF,MEGA ,FDC AND MANY MORE WITH NO SUCCESS. • OUR BUSINESS IS AT THE STAGE WHERE IS ABOUT TO CLOSE DOORS DUE TO NO ACCESS TO FINANCE AND ALL JOBS WILL BE DESTROYED.

  7. OUR EXPIRIENCES • IT IS NOT EASY FOR SME’S TO ACCESS FUNDING WHETHER YOU HAVE CONTRACT OR NOT , ITS ALL DEPEND ON WHO YOU KNOW. 2. MOST FUNDING INSTITUTIONS THEY LACK UNDERSTANDING OF ENVIRONMENT WHERE SME’S OPERATE.

  8. OUR EXPIRIENCES CONT. 2.1 YOU FIND THAT SME HAS BEEN AWARDED THE CONTRACT FOR TWO YEARS , THE FUNDING INSTITUTIONS WILL TAKE MORE THAN (9)MONTHS TO TELL THE SME THAT THE APPLICATION IS BEEN UNSUCCESSFULL OR SUCCESSFUL.

  9. OUR EXPIRIENCE CONT. 2.2 BY THE TIME SME RECEIVE FEEDBACK FROM THE FUNDERS THE CONTRACT IS ALREADY CANCELLED. 2.2.1 NO SENSE OF URGENCY.

  10. OUR EXPIRIENCES • DUE TO LACK OF UNDERSTANDING THE FUNDING INSTITUTIONS WILL OFFER THE WRONG PRODUCT TO SME EG. WHEN YOU NEED WORKING CAPITAL YOU GET REVOLVING CREDIT FACILITY. OUR COMPANY LOST MILLIONS OF RANDS THROUGH THIS PRACTICES .THESE IS WHAT IDC DEED TO US AND WE ARE IN BIG CRISIS TODAY AND OUR COMPANY IS ABOUT TO CLOSE DOORS.

  11. OUR EXPIRIENCES CONT. • MOST FINANCIAL INSTITUTIONS THAT ARE MANDATED TO FINANCE SME ‘S ARE RUNNED BY PEOPLE WHO NEVER BEING ENTREPRENEURS IN THEIR LIFE TIME AND THAT IS NOT HELPING THAT IS WHY YOU FIND IT IS EASY TO GET FUNDING WHEN YOU WANT TO BUY BUSINESS FROM THE WHITE OWNED COMPANY AS THE BEE PARTNER .,AND THAT ENCOURAGES FRONTING AND DESTROY ENTREPRENEURSHIP.

  12. OUR EXPIRIENCES CONT. 4.1 ENTREPRENEURS LIKE TO CREATE NOT TO TAKE . SO PLEASE SUPPORT CREATORS, BECAUSE THAT IS WHERE JOBS ARE CREATED.

  13. OUR EXPIRIENCES CONT. • JOBS ARE DESTROYED BY NOT FUNDING THE SME’S, ON DAILY BASIS SME’S ARE CLOSING DOWN DUE TO NO ACCESS TO FUNDING.

  14. OUR EXPIRIENCES CONT. • MOST SME’S ARE IN SURVIVAL MODE, THE REASON BEING AND EVEN IF YOU BORROW MONIES FROM YOUR FRIENDS TO HONOUR GOVERNMENT ORDERS- THE GOVERNMENT DEPARTMENT WILL TAKE MORE THAN A YEAR TO PAY. EXAMPLE BEING OUR CASE WITH GAUTENG SHARED SERVICES CENTRE WHERE THEY OWE US MONEY FOR MORE THAN YEAR AND THE MONIES ARE STILL NOT PAID.

  15. OUR EXPIRIENCES CONT • AFRICAN BLACK ENTREPRENEURS ARE PERCEIVED AS FAILURES AND ASSOCIATED WITH RISK THAT IS WHY YOU FIND, IF YOU ARE BLACK AND PARTNERING WITH WHITE OWNED COMPANY THE CHANCES ARE HIGH OF GETTING SUPPORT ,THAN WHEN BLACK BUSINESS PARTNER WITH OTHER BLACK OWNED COMPANY.

  16. OUR EXPIRIENCES CONT. 8. THE NEW GROWTH PATH WILL NEVER SUCCEED IF SME’S ARE NOT SUPPORTED , ALL PREVIOUS STRATEGIES HAS FAILED BECAUSE SME’S ARE NOT GIVEN FAIR CHANCE TO AIR THEIR VIEWS ON MATTERS THAT INVOLVES THEM.

  17. OUR EXPIRIENCES CONT. • IF IT IS TRUE THAT OUR GOVERNMENT INTEND TO HELP TO CREATE 5 MILLION JOBS IN THE NEAR FUTURE, THE GOVERNMENT FOCUS MUST BE ON SME-SECTOR AND FIRST PROTECT THE EXISTING JOBS AND CREATE THE NEW JOBS.

  18. CONCLUSION • IN CLOSING WE BELIEVE SME SECTOR CAN CREATE JOBS, ADD VALUE AND MAKE IMPACT IN OUR ECONOMY WHEN DOORS OF FUNDING ARE OPENED • MANY THANKS AND MAY GOD ALMIGHTHY CONTINUE TO BLESS EACH ONE OF YOU .

  19. QUESTIONS AND ANSWERS • QUESTIONS • ANSWERS • BY • THAPELO MOKOENA • THANKS & MANY • THANKS

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