Get to know your SME incentive schemes

Posted on July 29th, 2014

Get to know your SME incentive schemes

Broadening participation in the economy and strengthening economic development are part of Department of Trade and Industry‘s (DTI) objectives, and for this reason, the department has various incentive schemes for SMEs.

Financial support is offered for various economic activities, including manufacturing, business competitiveness, export development and market access, as well as foreign direct investment.

Four Development Incentives for Small and Medium Enterprises:

1. Black Business Supplier Development Programme (BBSDP)

This is a non-repayable grant to a maximum of R1 million divided into two spheres. R800 000 is to purchase tools, machinery and equipment, and R200 000 for eligible enterprises to improve their corporate governance, management, marketing, productivity and use of modern technology. The grant aims to grow existing businesses and to employ more people, not for start-up businesses.

Who qualifies: To qualify, enterprises must be black-owned and have been operating and trading for at least one year with a turnover of R250,000 to R35 million per annum.

Who should apply: You can apply, if you’re in the hospitality business and need to acquire stainless steel tables, fridges, stoves, ovens, tables and chairs.

2. Co-operative Incentive Scheme (CIS)

The Co-operative Incentive Scheme (CIS) offers a maximum grant of R350 000. It is aimed to promote co-operatives through the provision of a matching grant, assist co-operatives to acquire their startup requirements and build an initial asset base for emerging co-operatives to enable them to leverage other support.

Who qualifies: Co-operatives that are registered in South Africa in terms of the Co-operatives Act of 2005, and are operating or will operate in the emerging sector. The incentive is also biased towards women, youth and people with disability, rural and semi-urban based.

Who should apply:  Co-operatives that need commercial vehicles, electricity or boreholes, for example, will easily benefit.

3. The Technology and Human Resources for Industry Programme (THRIP)

On a cost-sharing basis with industry, THRIP supports science, engineering and technology research collaborations focused on addressing the technology needs of participating firms and encouraging the development and mobility of research personnel and students among participating organisations.

Who qualifies: Projects whose primary aim is to promote and facilitate scientific research, technology development, and technology diffusion, or any combination of these. There has to be at least one student who is registered at the postgraduate level per R200 000 of THRIP funding. Projects must also include human resource development. Applications opened on 24 June and closed on 25 August 2014.

Who should apply:  Post-graduate students and research institutions whose research contributes to scientific discoveries and innovation in industries such as agriculture, health, mining, etc.

4. Incubation Support Programme (ISP)

This is an R10 million maximum grant to develop incubators into successful enterprises.  The ISP encourages partnerships in which big business assists SMEs with skills transfer, enterprise development,  supplier development and marketing opportunities.

Funding provides for incubators that can generate revenue through the provision of services and initiatives that can be self-sustainable. The programme is effective from 1 September 2012 to 31 March 2022.

Who qualifies: Applicants must be a registered legal entity in South Africa in terms of the Companies Act, 1973 or the Companies Act, 2008; the Close Corporations Act, 1984 or the Co-operatives Act, 2005. Also, applicants can be a registered higher or further education institution or a licensed and/or registered science council.

See Also: Export incentives helping SMEs do business abroad