Topic:“Mainstreaming coops in the SMME

strategy in SA”

13 October 2011: Johannesburg

POLICY & LEGISLATIVE BACKGROUND FOR CO-OPS IN SA

The Co-operatives Policy of 2004One of the objectives is “to increase the number of enterprises in the SA economy”Sets out SA government intention about promoting co-operatives

The Co-operatives Act of 2005Provides a legal framework for co-operatives in SARecognises other types of co-operatives, and not only agricultural co-operatives

The Co-operatives Regulations of 2007Outlines the registration processes, forms, costs and governance of co-operatives

The Co-operatives Strategy of 2011Articulates programmes that should be in place to support the development of an independent co-operatives movement.

The Office of the Registrar of Co-operatives within CIPCResponsible for all registrations and de-registration of Co-operatives in SACurrently holding a database of about 35 000 registered co-operatives

MORTALITY / SURVIVAL RATE OF COOPS: CIPRO 2010

BACKGROUND TO EC CO-OPERATIVES FUND

Provincial Co-operatives Strategy adopted in 2009

Strategy informed by a detailed Baseline Survey conducted in 2008

R63 million committed in 2011/2012 to create a Fund that supports co-operatives

The ECDC appointed to administer the Fund in 2010

Governance of the Fund: A specific Funding Policy, Funding Committee, Criteria and Guidelines within the ECDC

Application Processes for the Fund: Applications are received, assessed against criteria, due diligence and site visit conducted,

Funding Committee Submission developed and presented in the Funding Committee that then makes a decision.

Mentorship and Technical Skills Training: All co-operatives approved for funding are entered into an intensive technical skills and

training programme in order to enhance the skills of members

SERVICES NEEDED BY COOPS IN EC – Order of Priority!

RESPONDING TO NEEDS ABOVE: ALLOCATION OF FUNDS

Term Loans – R40 millionLong term loans, linked to prime and repayable over a period of up to 5 years

Seed Capital – R10 millionPurchasing of basic equipment, certification for quality and standards in order to enhance competitiveness

Technical Skills and Mentorship – R4.5 millionProviding access to technical skills training, access to markets and mentorship on bookkeeping and administration

Governance Training – R4.5 millionAssisting members of co-operatives in understanding their constitutions and enhancing compliance with the requirements of the Co-operatives Act No.14 of 2005

Marketing and Communications – R4 millionOutreach programmes, information brochures, website, branding, etc

Economic Distribution of Funded Co-operatives

PROGRESS ON THE USE OF FUNDS TO DATE…….

42 Co-operatives have been approved under the Co-operatives Fund since July 2010 – September 2011

R26 million has been committed for Term Loans to the approved co-operatives

R1.8 million has already been committed to Technical Skills and Quality Improvement of Products of Co-operatives

Approved Agricultural Co-operatives include:Piggery Producers – slaughtering, packaging and selling to the market (local supermarkets)Vegetable and Crop Producers – planting, packaging and selling to the market (local supermarkets)Poultry Producers – growing, slaughtering, packaging and selling to the market (local supermarkets)Dairy Producing – milking, packaging and market (local supermarkets)

……..PROGRESS ON THE USE OF FUNDS TO DATE

Approved Manufacturing Co-operatives include:Brickmaking co-operatives – producing and selling to local contractorsSchool Furniture – making desks and chairs for local schoolsBread making – baking bread and selling within communities, local supermarkets and other spaza shopsSewing and textile – mainly producing uniforms for schoolsHoney Production – harvesting honey directly from bees, packaging it and selling to local supermarkets

These 42 Co-operatives are creating new jobs for approximately 674 people within their communities, over and above about 210 members that are also working in the co-operatives

Our approach is strictly BUSINESS and we implement proper credit guidelines in granting loans. It is possible!

WHAT NEXT FOR THE ECDC

ECDC will be signing formal Memorandum of Agreement with the SABSQuality Assessment of co-operatives productsTraining and Certification (SABS stamp on products)Improved market access

ECDC to engage Woolworths, Spar, Pick n Pay, Shoprite, Boxer, etcSupply vegetablesSupply chickens and pork meatSupply honey

ECDC to engage Dept. of Health, Education, Clothing stores, etcSupply of school uniforms, hospital linen, patience pyjamas, other garments

These efforts are to improve access to markets whilst improving product quality for co-operatives.

ECDC will now introduce bookkeeping and governance mentorship

LONGTERM VISION- ECDC seeks to ensure the loans are repaid,- Co-operatives sustain jobs that they create

- Co-operatives conduct business in a sustainable manner- Co-operative grow their businesses by supplying the right quality

products on time, all the time.

Qualifying Criteria for the Co-operatives Fund The following criteria needs to be satisfied in full in order for an application to be considered under Imvaba Co-operative Fund:

•A Registered Co-operative under the Act No.14 of 2005

•A formal business plan;

•A fully completed application form;

•Resolution by members to apply for the funds;

•Certified copy of the Registration Certificate signed by the Registrar;

•Certified copies of the Constitution of the co-operative;

•Certified ID copies of the founding members;

•Tax Clearance Certificate of the Co-operative;

•Proof of Bank Account

•Short CV’s of founding members;

•Lease Agreements (where applicable)

•Letters of intent from the potential market for the products

ENKOSI KAKHULU!

THANK YOU VERY MUCH!

BAAIE DANKIE!