We received (and accepted) the invitation from Nontobeko Vilakati for the 2019 Masisizane Fund Annual Client Market Day. The Masisizane Fund is “a non-profit funding entity established by Old Mutual in consultation with the National Treasury of South Africa following the closure of Old Mutual’s Unclaimed Share Schemes Trust”. It provides crucial support to SMMEs in the agribusiness, manufacturing and franchising sectors.
I arrived at 107 Rivonia Road, and was shown where the event was taking place: the Old Mutual Retail Space. People milled around and I wandered to the showcased entrepreneur stands.
The first was from the franchise sector. Masisizane had put up 50% of the capital required to acquire and operate the Caltex service station in 2018. At the far end was a co-funded 100% black-owned and operated legal business, and CTU Manufacturing Primary Co-operative (CTU). This co-op manufactures hospital linen and apparel/attire and uniforms. Another Masisizane client offers voice analysis technology (see www.lexforensica.co.za), but it was Bamboo Innovations Africa (BIA), obviously an agribusiness, that caught my attention and I wandered closer.
BIA was begun in 2012 by Mr Peloyotlhe Gabaraane, initially to manage projects aimed at growing and processing bamboo. For reasons including funding which did not arrive, Gabaraane switched to the fresh produce sector. While Gabaraane is engaged in a discussion with two others, I talk to Clement Mawele (Masisizane Fund) about the Masisizane funding model. Although, like banks, Masisizane takes into account things like assets and turnover, it is more interested in the business plan, the suppliers, market and partners. It was through its provincial offices that Gabaraane approached the Fund.
The opportunity arises to speak to Gabaraane, and excusing myself I step forward and greet him. He explains why he left bamboo after he had picked up an interest in cash crops. He accessed CASP funds offered by the Department of Agriculture which enabled him to become visible, he says. It was the loan from the Masisizane Fund though which enabled him to acquire and construct the closed-circuit hydroponic system in 2018 in the Klupmuts farming area in the Western Cape.
BIA has 2 hectares under shade tunnels, and since it began operations in September 2018, has sold more than 400 000 heads of lettuce. Among his customers are Shoprite, Spar, Pick n Pay. A packhouse is planned in the future as doors are opening for the business. He speaks of challenges posed by pests and diseases, and how he uses integrated pest management (including biocontrol) to manage these. But proceedings have begun and I make my way to a chair.
We hear from personnel like Zizipho Nyanga (CEO) and Tabby Tsengiwe how access to funding and markets are the problems for entrepreneurs, and how Masisizane has funded 400 enterprises (29% in agriculture).
A panel discussion takes place, with four clients of the Masisizane Fund answering and discussing questions put to them, and then fielding questions from the floor. I hear them all, but it is to what has to do with agriculture that I pay particular attention.
What is Gabaraane favourite South African brand? The South African flag, he says. There is a South Africa out there that is “real”, he says; that is not trying to hide anything. We should stand behind it. He is very positive about the Paarl area and the people where he farms, and says the most unlikely characters greet him.
How has Masisizane Fund helped him? He speaks of how Black farmers struggle to become visible; how many opportunities lie just out of reach. He needed infrastructure to grow lettuce, to switch to a better way of farming. Hydroponics is the ideal for him: it is environmentally-friendly; saves water; because the crop isn’t grown in soil it is easier to prepare for market. The assistance provided him means he can compete on a global level now. It is “a complete transformation!”
He describes further the expertise that he has picked up – being able to identify pests and diseases, recognising what nutrients are lacking in the crop and how to address this. Previously he had to depend on another’s expertise. It is “priceless” what he has gained.
His encouragement to budding entrepreneurs is that opportunity will come from someone, somewhere. Diligence right from the beginning is important. The diligence begins with the forms you have to fill in when applying for loans. He speaks about how his lead began with a phone number on the Department of Agriculture website; how after his first unsuccessful interview for CASP funding he refined his business plan and how he applied again because the vetting staff “hadn’t heard him”. You don’t need “fancy words” to get there. You need vision. And to ASK.
The CTU Manufacturing Primary Co-operative was asked “why the co-operative model?” Her answer was another takeaway. Co-ops teach responsibility and self-reliance. People are partners, not employees. There is accountability on a daily basis. At the end of the day each person knows what their contribution has been because there are agreed measurables to be complied with.
The keynote speaker, Andile Khumalo, referred to the observation that there are more people in the welfare system than there are in employment. South Africa is a rich country filled with poor people – 55% of the population lives on less than R1 000 a month. Tambo and Mandela met the challenges of their time. The challenge of today is income inequality. Entrepreneurship is the answer. Creating economic opportunities in townships and in the rural areas – where people live – is where entrepreneurs should focus. Khumalo tells us that Ga-Rankuwa, an area some 40 kilometres north of Pretoria, is the most expensive area in the country to live in – because of the proportion of income that must be spent on travelling to the urban areas.
After a short address by Iain Williamson, Chief Operating Officer, he cuts the cake and we break for a light lunch.
Relevant pages on AgribookDigital include “Finance for new farmers & SMMEs“, “Hydroponics & undercover growing“, “Co-operatives“, “Vegetables“, “Biocontrol” and “The urban question“.
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