Timothy Olaniyi Aluko

This paper investigates factors determining co-operative small enterprises access to the co-operative grant incentive scheme in South Africa. The raw data used in this study were extracted from the Cooperative Incentive Scheme (CIS) database over the sample financial period FY 2010/11 to FY 2014/15. The amount approved was modelled as the dependent variable, while the turnover prior to application, number of employees, number of members, number of males, number of females, number of youth, number of the disabled, and purpose of application for additional capital were the exploratory variables in the model. Statistical Package for Social Sciences (SPSS) version 24 for Windows was used to perform data processing and statistical analysis using the multiple linear regression method for the overall model and stepwise multiple linear regression method at sectoral level. Estimated results indicate that turnover prior to application, the number of members, males, females and youth had a significant impact on the amount approved for the applications submitted by firms in the agricultural and manufacturing sectors during the sample financial years under review. The paper concludes that the department of small business development should focus on implementing strategies that promote access to the CIS grant funding targeting SMEs co-operatives in the agriculture and manufacturing sectors located mainly in the rural areas of South Africa.

Keywords: small and medium enterprises, co-operative, grant, incentive, South Africa.
JEL Classification: L26, H81

Government initiatives to eradicate poverty in developing countries have included establishing microfinance programs to provide microloans and credit to the less privileged living in peri-urban and rural areas where commercial financial institutions are underrepresented. The study aims to investigate the effect of the South African Microfinance Apex Fund (SAMAF) on poverty alleviation and job creation. This case study targeted 103 beneficiary firms and self-employed individuals to send them questionnaires. The data analysis was primarily exploratory and descriptive. The findings show that the majority, 87%, agreed that the loans they accessed were sufficient for their business plans and needs. In addition, they were able to create at least one additional job after receiving the loan and improve their total business income on average compared to before the SAMAF loan. However, due to the risk of non-repayment of loans by recipients living in informal settlements, most microfinance intermediary institutions were unwilling to expand their operations into such settlements. SAMAF, on the other hand, has flaws, one of which is the slow delivery of funds to microfinance intermediary institutions, which needs to be addressed. The study concludes that to address the credit needs of semi-rural and rural residents, microfinance intermediary institutions must do more to expand into these areas and adopt a more aggressive and creative approach to the development of financial products and expand their access to include more of the poorest and most vulnerable households.