sefa and the AIDC announce partnership to give SMMEs in the automotive and related manufacturing industries a leg up

The Small Enterprise Finance Agency (sefa) and the Automotive Industry Development Centre (AIDC) have announced a combined initiative that aims to support South Africa’s automotive and manufacturing industries by improving access to opportunities for SMMEs and boosting supply-chain and enterprise development, among other efforts.

The two parties yesterday signed a Memorandum of Understanding (MoU) at the Automotive Supplier Park in Rosslyn, Pretoria. The agreement sees sefa and the AIDC entering a purposeful partnership to deliver on targeted programmes of mutual interest, which will also address transformation of the automotive and manufacturing industries.

The MoU will last for five years, with the option to extend a year before its expiration date.

sefa, through its Small Enterprise Manufacturing Support Programme, supports projects from the manufacturing sectors that help drive localisation. The agency’s Township and Rural Entrepreneurship Programme is geared towards the revitalisation of township and rural economies. The AIDC’s Skills Development and Training department identifies sectors with skills deficiencies, and then develops programmes to equip individuals with the necessary skills to drive economic growth throughout South Africa’s automotive industry.

The MoU outlines the following objectives:

  • Increase the number of participants, especially black participants, across the value and supply chains, and across enterprise development in the automotive industry
  • Promote fair competition in the automotive sector
  • Carry out and deliver on targeted programmes that include transformation and ensure access to opportunities for SMMEs
  • Implement the AIDC’s transformation policy, informed by the need for partnerships with enabling entities in the public and private sectors
  • Build strategic relations that will enable emerging contractors, professionals and suppliers to gain access to direct development support

The AIDC’s vision is to grow the local automotive manufacturing industry by boosting local content production to 70% over the next few years; and sefa aims to be the leading catalyst for the development of sustainable SMMEs and cooperatives through the provision of finance.

“The aim of the MoU is to provide finance where the private sector is unwilling to get involved, particularly for black-owned SMMEs. We’re interested in targeting incubators and helping to take them to the next level,” said sefa CEO Mxolisi Matshamba, speaking at the launch.

“We would like this MOU to be target-driven. We will develop a steering committee that will report regularly on underperforming facilities in the automotive space so that sefa can move into the supplier development space and help where we can. I’m excited and hope that in the next month or two we will be able to check on progress made towards the key milestones of this MoU.”

AIDC acting CEO Jameel Chand said the partnership was crucial to supporting the objectives of both organisations, and that the continent was looking at Gauteng to become “a hub for electric-vehicle manufacturing”.

“We see organisations such as sefa as critical in supporting SMMEs to grow the capacity to drive the automotive industry. The AIDC is excited to be in partnership with sefa to support SMMEs,” he added.

Both parties are committed to establishing direct developmental support and structure for small enterprises and emerging contractors in the automotive and related manufacturing industries, including finance, training and business development.