As early as April 2004, small businesses in the Eastern Cape could have access to R12 million in finance and various other business development services.

A pilot project, which will determine the outcome of this initiative, is currently underway in the OR Tambo District and should be completed in March this year.

The project targets small businesses who require loans as low as R500 or as high as R100 000.

The initiative, which is part of the Small Enterprise and Human Development Programme and is an integral part of the South African government’s strategy to grow small businesses, aims to improve access to finance for survivalist, micro and very small enterprises.

"In the past, we have had great difficult servicing this sector. This pilot is certainly what we need and will help us understand this sector far better. The infrastructure, the OR Tambo Economic Development Agency (ORTEDA), appears to be the right type of infrastructure for this initiative and one which has been proven to work elsewhere in world like in South America," says Eastern Cape Development Corporation’s Moshe Sohaba.

"We are successful in providing loans for R100 000 or more. However, this hasn’t helped the smaller entrepreneur who, quite clearly, has been alienated. Furthermore, we have had limited options to whom we could make referrals. Without a doubt, this initiative will make a huge difference to both the ECDC and this business person," he says.

The businesses which will participate in the pilot project will be chosen from a database compiled from applications already received from the OR Tambo District.

The project partners in this province are the Eastern Cape Development Corporation (ECDC) and the United Nations Office for Project Services (UNOPS), the implementing arm for the Italian government.

"We are confident that the pilot project will point to a successful initiative once we have the addressed the obvious changes to methodologies. After that, we will take the concept to other districts where we will be able to help a great deal more people than is envisaged in the pilot project," ends Sohaba.

The project is also underway in three of South Africa’s other poor provinces: Limpopo, Mpumalanga and Northern Cape. The targeted districts in the four provinces make up about a staggering 12% of the total South African territory and contain about eight per cent of the national population.