Overview of CSI spend on entrepreneur and small business support in 2023

Trialogue conducts annual research into CSI spend on each development sector in South Africa. In 2023, 68 large companies participated in Trialogue’s primary research survey. According to the research, entrepreneur and small business support was supported by 38% of companies and received 8% of average CSI expenditure in 2023.

National context of entrepreneur and small business support in South Africa

• The Department of Small Business Development (DSBD) was allocated R2.8 billion in 2023/24, constituting 0.1% of the consolidated government expenditure of R2.24 trillion for the year.
• The Small Enterprise Development Agency (SEDA) of the DSBD was allocated R2.7 billion between 2023 and 2026 to support 30 000 young entrepreneurs. SEDA also plans to support 9 000 small, medium and micro enterprises (SMMEs) and cooperatives to become competitive in local markets and create 15 000 jobs.
• According to a DSBD budget vote speech given by the minister in May 2023, the Township and Rural Entrepreneurship programme (TREP), managed by SEDA and the Small Enterprise Finance Agency (SEFA), provided financial and/or non-financial support to 23 344 enterprises located in townships and rural areas in 2022/23. The programme was allocated R909 million for the 2023/24 financial year and is targeting 30 000 enterprises.
• The SEDA SMME quarterly update published in March 2023 indicated that the number of SMMEs in South Africa increased by 11% from 2.4 million in the third quarter of 2021 to 2.7 million in the third quarter of 2022.
• As at April 2023, South Africa’s SMMEs contribute 40% towards the gross domestic product (GDP), as reported by the DSBD. However, only 37% of South Africa’s SMMEs are formally registered.
• In April 2023, the DSBD published the revised SMMEs and Cooperatives Funding Policy for South Africa. The policy aims to improve access to the finance ecosystem for SMMEs and cooperatives so that the range of financing instruments available to them is broadened. It also looks to improve access to credit and to promote the use of transaction account and payment services as well as encourage the uptake of suitable insurance services.
• A survey conducted by FinScope in 2020 found that South Africa had an estimated 2.6 million entrepreneurs, of whom 46% are female and 37% are youth.
• In 2021, South Africa ranked 45th out of 50 economies on the Global Entrepreneurship Monitor’s (GEM) National Entrepreneurial Context Index, which indicates the average state and quality of the entrepreneurial ecosystem in the country.

Overview of CSI spend

Entrepreneur and small business support was supported by 38% of companies and received 8% of average CSI expenditure.

Type of intervention

Average % CSI entrepreneur and small business support spend n=27

75% Skills development for entreprenuers/business owners

11% Providing infrastructure, facilities and equipment

11% Non-specific general donations

3% Providing finance

• Three-quarters of CSI expenditure in this sector (75%) went towards skills development for entrepreneurs/business owners, a significant increase from 49% in 2022.
• Providing infrastructure, facilities and equipment received 11% average spend in this sector, a decrease from 24% in 2022.
• The average spend allocated to providing finance has fallen from 18% in 2022 to 3% in 2023, making it the least supported type of intervention in this sector.

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Source: The original version of this article was published in the Trialogue Business in Society Handbook 2023 (26th edition).