The SA government’s view of financial inclusion and microfinance

The SA government’s view of financial inclusion and microfinance

I thank you for the invitation to the Ministry to address issues of micro-finance with you at this important gathering. As the government of South Africa, we recognize that one of the key impediments in the SA economy is affordable access to finance by the poor and un-banked communities, especially in rural and peri-urban areas.

In South Africa and yes throughout Africa and the world, women and children are more vulnerable to poverty. Black women also form the largest part of South Africa’s unemployed persons, and rural women in particular find themselves at the bottom of the economic pyramid.

Evidence indicates that women, when given access to micro finance and credit are able to make better use of it than any other group. Because of the increasing responsibility of women in heading up households, micro finance programmes that target female clients will not only benefit individual clients, but will benefit households as a whole. In this regard, therefore, we see micro finance as an important tool for the economic empowerment of women.

In this regard, we see micro finance as an anti-poverty tool to stimulate and activate development at a local level by providing households, who are usually excluded from the banking sector, with access to financial services. In so doing this has the potential to create employment, increase incomes and expand economic opportunities.

Programme Director, as government we have a moral and social obligation as well as a constitutional imperative to address this issue. In addressing this issue we need to consider that firstly, an increasing reliance on social welfare measures is not sustainable for obvious reasons.

Importantly, we need to consider that through a reduction in our levels of inequality we will be able to achieve higher levels of economic growth for our country, however, high levels of inequality and poverty can result in social instability and an increase in the levels of crime which will discourage investment in the country.

Moreover, our country will not be able to achieve its full potential if we rely on just a small section of our population for production, business activity, skills, taxes and the bulk of consumption.

It is a well known fact that it is essential that government creates suitable legislative and regulatory environments that support development. The operating environment must allow for a wide variety of financial products that adequately meet the needs of the population including the rural and poor. This environment must be suitable for the promotion of sustainable institutions whilst the rights of the consumer are protected.

The implementation of sustainable development financial institutions requires a good understanding of the sector and of the methodology. Experience and specialised training are essential to the successful development of the sector. South Africa in comparison to the rest of the developing world is lagging behind in developing the microfinance sector.

A number of institutions have been formed over the years and only a few of them have survived and a lower number of these have reached sustainability. The demand for the services of these institutions remains high with many areas not having been reached at all.

To this end, Government created the South African Micro-finance Apex Fund (samaf) to amongst other things address poverty reduction as well as provide affordable and appropriate financial services for the poor in a sustainable manner.

This was born out of the realization that after years of its operation, Khula Enterprise Finance interventions and other initiatives in micro-finance, delivering credit to the poor without building capacity to the recipients is counter productive.

Experience and common sense demanded that the country re-looks the current approaches and models for micro-finance to include a developmental approach to micro finance for the poor and destitute in our country, that considers them as both beneficiaries and co- directors of the process, and not just mere consumers.

Samaf was established with a very specific mandate from the government. It had to provide financial services at a cost more affordable than the costs currently charged by micro-finance practitioners. It had to reach the people where they were and extend the services to enterprising poor in peri- urban and rural areas. It must encourage people to save, in that way creating wealth for economic development benefits. Lastly, it should build the capacity of intermediaries who on-lend to the beneficiaries to achieve growth and development in a sustainable manner.

Programme Director: It is a well known fact that a sound financial sector is a function of an integrated and efficient financial system that caters for all financial institutions within the sector. This also applies to microfinance institutions. Unlike other micro financing mechanisms available, samaf will link up with the community based financial services initiatives, strengthen these and build their capacity to deliver their products. To be effective, samaf will have to keep systems simple and appropriate to the environment within which they operate and costs down through community ownership and management.

Ladies and gentlemen let me leave you with this quote by the founder of the Grameen Bank, “I believe that we can create a poverty-free world because poverty is not created by poor people. It has been created and sustained by the economic and social systems that we have designed for ourselves; the institutions and concepts that make up that system; the policies that we pursue.”

I thank you.

The South African Quality Awards

“Quality is remembered long after the price is forgotten”, a slogan from one of the world’s top brands in luxury goods.

The concept “Quality” can be contentious as it is often interpreted in different ways.

So to be clear, today we are talking about quality in the context of the pragmatic interpretation, as the superiority of something in business, engineering and manufacturing. The specific context for today being the application of the tools made available through the South African Technical Infrastructure.

These tools are the standards, quality assurance, accreditation and metrology administered primarily through the related institutions such as the National Metrology Institute of South Africa, the South African Bureau of Standards and the South African National Accreditation System who are also the coowners of this event.

At the same time I use this opportunity to acknowledge the integral part that commercial service providers play in the offering of services in the quality assurance domain, such as testing, certification, inspection and calibration.

Ladies and gentlemen, we have also said that we are determined that the Standards, Quality Assurance and Metrology institutions need to play a more strategic role in advancing industrial policy objectives.

Therefore during the development of the second Industrial Policy Action Plan (also known as IPAP 2) the role of the South African Technical Infrastructure was enhanced to optimise its role in the advancement of industrial policy. As government, we rely on a well functioning Technical Infrastructure system to serve as a foundation for internationally acceptable technical regulations. This foundation will ensure that we are able to “lock in” in our exports to markets which require high standards and “lock out” low quality and unsafe imports into the domestic market.

To achieve these objectives, proper implementation will be critical, which in turn requires being increasingly pro-active and greater collaboration amongst all the stakeholders. An important component of such collaboration is that stakeholders must be our eyes and ears in the marketplace.

In this regard, a key challenge we have identified is inadequate market surveillance. Our challenges relating to market surveillance is in fact detrimental to the economy as a whole, as leaving the domestic market and consumer exposed to unsafe non-compliant products serves to undercut the productive base of the manufacturing sector and is harmful to the consumer as well as to the environment.

Therefore one of the immediate steps we are taking is pre-market surveillance at the border with the National Regulator for Compulsory Specifications and the South African Revenue Service working together to put the necessary systems in place.

Therefore one of the immediate steps we are taking is pre-market surveillance at the border with the National Regulator for Compulsory Specifications and the South African Revenue Service working together to put the necessary systems in place.

Programme Director, there are a few other key matters I want to address this afternoon. Firstly, the Technical Infrastructure institutions have indicated that there is substantial lead time in the development of standards, be it national standards or measurement standards.

In IPAP2 we have developed the Key Action Programmes to reflect these dynamics and the sequencing between the different elements of the Technical Infrastructure Institutions. In this way, more than ever before, our initiatives are beginning to “talk to each other” in a way that will ensure that the whole is greater than the sum of the parts. I congratulate you all on your efforts to make this happen.

Secondly, to remain abreast of international developments, the South African Technical Infrastructure institutions are all members of the respective international organisations that set the rules in their field of operation. So, by participating in the activities of these bodies, our institutions not only influence international developments in our national interest, but their participation also acts as an early warning system where trading partners are considering the imposition of potential Technical Barriers to Trade.

Thirdly, one of the Key Action Programmes is the development of a tracking system for technical regulations. This system allow sectors to which a specific technical regulation applies – and to which the information will be disseminated- the opportunity to provide their opinions on how this will affect them in terms of market access.

Fourthly, this Quality Awards ceremony comes at an opportune time in that it allows a broader spectrum of stakeholders to be made aware of the internationally recognised services that are provided by the Technical Infrastructure Institutions in their respective fields and to promote the benefits that industry derives from the use of these.

We therefore encourage all our stakeholders to use this event for further networking and furthering your knowledge regarding quality. the dti sees the continuous improvement of quality as a key element of developing sustainable value chains to enable companies to successfully compete in global markets.

Finally, I would like to congratulate all the winners and finalists on this
achievement, but also every company that made the effort to enter.

Your success stories bear testimony to the value that the Technical Infrastructure has added to the quality improvement of your products and services. Although quality comes at a cost, this is outweighed by the benefits of creating and maintaining a competitive edge as well as the management of risks associated with the rejection of products and services due to noncompliance. As you would have gathered, the winners of the respective categories will be submitted as finalists to the SADC Quality Awards that will take place in 2011.

I know you will also do us proud in the regional arena. All the best for your future endeavours, may we as a collective go from strength to strength in achieving our goals related to economic growth, employment and empowerment.
Thank you!

SAWEN National meeting ICC Durban

I’m sure those of us who attended last night’s awards ceremony enjoyed the occasion. Once again if the winners are amongst us, we say well done. Let me also pay tribute to all my predecessors, the previous Deputy Ministers of Trade and Industry who all worked tirelessly and passionately in the pursuit of women’s economic empowerment. It is largely through their efforts and the passion of people who served and is serving as board members and provincial chairs that we are all able to be here today. Your efforts may go unheralded but definitely not unnoticed.

Ladies and gentlemen, SAWEN has had its fair share of challenges, like any organization. These challenges are not insurmountable or terminal. I see these challenges as an opportunity to grow the organization to great heights. We have many people connected to SAWEN in different capacities, either as members, as provincial leadership, as board members, as officials. All of us have an important role to play in building this organization.

Ladies and gentlemen over the past few months in various publications I have come across articles where women who have started their own businesses mentioned that it was after attending a SAWEN meeting that they were inspired to enter this difficult terrain. This is a good sign, your organization is relevant, and there is a compelling reason for its survival.

Honoured guests, this year we celebrate the 20th anniversary of the release of President uTata Mandela from prison. To honour this icon the theme for this year’s State of the Nation Address was, “Celebrating the legacy of Mandela, Contribute to nation-building”.

What greater example can we use but that of Madiba himself, someone so committed to building this nation that he put was willing to put his own needs second to that of the people of this great country of ours. So, ladies and gentlemen, let us follow the example given to us, let us build the organization and in this way build our nation.

Ladies and gentlemen, the dti is committed to continue our support to this initiative of ours called SAWEN. It is in our and our country’s interest to have a healthy, well functioning organization committed to serving the needs of all women, aspiring as well as established business women in urban, peri-urban and rural communities.

We have to grow our numbers and commit to reaching more women, to make our programmes relevant to the needs of a changing environment and assist in sourcing business opportunities for women. I commit my time and energy to assist in reaching as many communities as possible to grow SAWEN. Ladies and gentlemen, later the Head of the Gender Unit and the acting CEO of SAWEN will give details and make suggestions on how from the department’s side we see SAWEN growing.

We also need your ideas and inputs to complete the process and my appeal therefore to you is to be actively involved in this process. Make your suggestions but also listen to other views and then decide what would be in the best interest of the organization.

Ladies and gentlemen last week Minister Davies announced the new Industrial Policy Action Plan (IPAP) 2, a plan by government and the dti in particular to grow our economy by creating jobs and increasing our manufacturing capacity. Later this year we will draft and release our strategy for small business. This is definitely the year of action, the year that we must deliver to the people of our country.

Ladies and gentleman these plans of ours will come to nothing without the participation of our communities, in this instance the women who are part of the SAWEN community. Ask the officials and myself as part of the dti leadership collective how these plans would benefit women owned businesses. There will be public hearings by the Parliamentary Portfolio Committee on Trade and Industry on the IPAP, organize and where possible send your representatives to those hearings, to influence policy. You may also make written submissions but please read the document first.

This would be in keeping with the original objectives that, ‘SAWEN be an overarching gender equality policy influencing body’, amongst other things. Ladies and gentlemen as I conclude I wish to leave you with words of wisdom and encouragement for the work that we do and to tackle the task that faces us in improving the conditions for the women of our country.

“You are given a gift that is unique; develop your character to the level that you want. You are created in His image. Use your mind to achieve great things. You are ungumgqotswa ka Jehovah, born to be great and born to do great things”, so it says in 1 Chronicles.
Do great things! I thank you

It is a great honor and a privilege for me to be here to welcome all of you to the Technology for Women in Business conference (TWIB). This is my first TWIB Annual conference since I was appointed one of the two Deputy Ministers of Trade and Industry last year. I am tasked with spearheading, among others, gender and women empowerment programmes within the Department of Trade and Industry.

This annual conference happens twenty years after President Nelson Rolihlahla Mandela was released from prison and all liberation movements were unbanned. As we celebrate this momentous event that lead to our liberation let us not forget what Madiba said, that “Money won’t create success, the freedom to make it will”. Also our freedom is meaningless without the full participation of women in our society.

Continuously blaming our failure to succeed, on our past experiences as a country and people will not assist us as a nation to move forward. While we acknowledge the injustices of the past let us recommit ourselves to the ideals that brought about our freedom. We must once again embrace a ‘can do attitude’. What is it that I can do to grow my business, am I able to create jobs for others? How do I modernize my business to use technology to give me a competitive edge?

I was tasked with addressing this conference on the “Role of Women entrepreneurs in ensuring the shared growth of the South African Economy”. Ladies and gentlemen maybe I should start by answering the question, “what is an entrepreneur”? The definition says that, “the availability of natural resources, labour and capital is not sufficient to ensure economic success but this has to be combined and organized by people who sees opportunities, are willing to take risks and produce goods that can be sold.

The entrepreneur is the driving force behind production, an innovator, an initiator who introduces new products and new techniques. They are risk bearers and people who take a chance, even if the odds are against them. An entrepreneur is dynamic, a restless spirit, an ideas person, a person of action who has the ability to inspire others.

Programme Director, during his State of the Nation Address, President Zuma said,” We also need to integrate gender equity measures into the government’s programme of action”. Indeed, if the women of South Africa are to share in the growth of our economy, the issue of gender equity will have to be integrated into our government’s Plan of Action. But Ladies and Gentlemen, the integration of gender equity into our plan of
action alone cannot ensure and/or guarantee that the women of South Africa will share in the country’s growing economy. The integration of gender equity should be complemented by the enthusiasm and diligent commitment of all relevant stakeholders and in particular, women entrepreneurs.

As indicated by Minister Pravin Gordhan during his Budget Speech on the 17 of February, income inequality in South Africa is amongst the highest in the world; and half our population in South Africa survives on 8 per cent of national income. This is a very disturbing reality considering that the majority of our population comprises of women. We therefore need to speed up the implementation of our programmes that can benefit women.

Programme Director, this year’s conference is themed “MAXIMIZING WOMEN’S SUCCESS THROUGH TECHNOLOGY” and this theme was carefully chosen to reflect our intentions of how we further intend to work towards the economic emancipation of women in South Africa through the sharing of this country’s growth. As we move forward, our priority is to drive implementation that will ultimately ensure that South African women, and in particular women entrepreneurs are major beneficiaries of the country’s economic growth. As part of ensuring that women of South Africa benefit from the economy’s growth the dti’s Gender and Women Empowerment Unit responded in the Strategic Framework on Gender and Women’s Economic Empowerment by proposing the re-alignment of TWIB through the Technology for Women in Business Awareness Programme as an intervention. The purpose of this programme is to link women entrepreneurs with relevant science and technology business solutions that will encourage their business activities.

This includes exposing them to both local and international best practices that will assist them to diversify and modify their products and services by using cutting edge technology to meet ever-changing business demands. It is our intention as the dti to implement this as a national drive awareness programmme aimed at encouraging women to use technology and also to be innovative in order to advance their businesses.

At the end of this conference we want to ensure that we have an agreed plan of action. A plan that we can both own and work towards in achieving one of the dti’s strategic objectives of promoting broader participation, equity and redress in the economy.

Ladies and gentlemen, allow me to share with you some of our women’s empowerment programmes in the department. In order to ensure that we continue to drive and fast track women’s economic empowerment in this country, as the dti through the Gender and Women Empowerment Unit.

After the approval of the strategic framework on gender and women’s economic empowerment by the department’s Executive Board, commencement on piloting the implementation of some of those interventions has begun. This include among others, the successful piloting of Bavumile which is a capacity building programme for women in Art and Craft and Clothing and Textile.

This programme is aimed at assisting women in product development, product packaging and pricing and basic business management trainings. I am also pleased to acknowledge the Adjudication Panel for the Program and also wish to take this opportunity to welcome them as they start to assist us in shaping the program in the right direction.

Ladies and Gentlemen, also allow me to report to you that after the official unveiling of Isivande Women’s Fund in Polokwane last year, all the received application forms have been submitted to the fund manager for assessments and funding. The fund is one of our strategic interventions to address the challenge of lack of access to business finance for women. Mr. Jeremy Pos, an account Manager at the IDC’s Risk Capital Facility responsible for this fund will give you a detailed presentation during the panel discussion on Financial Business Support for Women Entrepreneurs later this afternoon.

The Unit is also working on strengthening the South African Women Entrepreneurs’ Network (SAWEN) to ensure that it indeed represents and articulates the aspirations of all women entrepreneurs (existing and potential) that operate within the South African SMME as well as in the wider business sector. The strengthening of this programme was discussed in detail at the SAWEN Polokwane conference; those who will attend the national meeting tomorrow will be given a complete briefing.

It should also be noted that, most importantly, parallel to implementing the above-mentioned programmes, the dti’s Economic Research and Policy Coordination Division is assisting the Unit in monitoring and evaluating the impact of these programmes.

Women can today celebrate the shattered stereotypes around women and technology, women and finance, women and leadership as well as women and business; and are living proof that excellence knows no racial or gender boundaries. That when you have intellect, talent and potential you must never allow anyone to take it away or deny you its full usage.

Once women are technologically literate they can transact, educate themselves and their children, as well as trade globally, without leaving the comfort of their homes and villages. As a second economy intervention, technology has the power to link the second economy to the first economy and mainstream women. Countries like India, have already demonstrated, that it is possible for poor rural women in co-operatives to supply top retailers in developed countries and thus emerge from poverty. Our own techno-girls in the rural schools have proven that it is possible to get the best technical training, qualifying with internationally recognized certificates.

These interventions need to be amplified! Not just for business but for literacy, community development as well as in the combating of diseases. Imagine a rural doctor or nurse, being able to email some of the world’s top specialists, and get advice that can heal a dying rural woman, and thus save her life.

On the other hand, imagine one excellent mathematics teacher, teaching thousands of rural kids, and ensuring that they get top quality education, thus breaking the chain of poverty. The past winners of our techno-girls competition have come from all walks of life and from all provinces, representing an admirable urban and a rural spread.

Ladies and Gentlemen, we are relying on your input during the conference’s discussions to enable us to create an enabling environment to ensure that women indeed benefit from our country’s economic growth. I therefore wish you the best of luck during your deliberations as the conference goes forward. Thank you to everyone who put in an exceptional effort to make this conference a success, from the participants to the officials, in particular from the Gender Unit, from the technogirls and the hardworking teachers to the adjudicators on the panel. To all who were involved in any way big and small, thank you.

Programme Director, Ladies and Gentlemen, tonight we will, in a form of a gala dinner, be awarding women entrepreneurs who have successfully and profitably innovated and applied technology to expand their businesses operations. This is the annual TWIB awards, which will be hosted tonight in this very same venue. Ladies and gentlemen you are most welcome to join us, I believe from previous ceremonies that it is an occasion not to be missed!
Malibongwe!!!

I thank you.