Emerging business on fast track to success

A project to support 1 000 co-operative enterprises, backed by R163 million in funding from the NSF, is putting emerging businesses on the fast track to success and sustainability.

The project to develop and sustain these co-operatives has led to numerous new business opportunities not otherwise available to them. The Letsatsi Co-operative Development project was initiated in support of the NSF’s strategy to assist 1 000 co-operative enterprises with training, mentoring and administrative interventions to ensure co-operatives have sustainable businesses.

The project was initiated in response to a Department of Trade and Industry (DTI) baseline study, conducted in 2009, which showed that of the approximately 17 000 registered co-operatives, only 2 664 were functional and they contributed only 0.33% to GDP, indicating the co-operative sector is yet to fulfil a significant role in the economy as a source of employment and poverty alleviation.Run over three years from July 2012 to June 2015, and with funding of R163 million, the project was managed by LHR Solutions, trading as Letsatsi, a private FET college, under contract to the DHET.

Letsatsi identified 220 qualified Co-operative Development Facilitators (CDFs) who were deployed nationally to support 1 000 predominantly black-owned emerging co-operatives with technical and developmental support and training mentoring and administrative support. Objectives included education and training in principles and governance; financial, market, governance and strategy competencies; technical skills to improve marketability and productivity; and development and business improvement.There were some initial challenges, including difficulties recruiting appropriate learners, language barriers due to poor literacy levels and stakeholder relationship issues. But the project achieved its overall objectives and, in the case of some deliverables, recorded over-performance and more people than initially planned have benefited from the training.

The successes include a number of CDFs moving to permanent employment and co-operatives securing contracts with private and municipal organisations. Co-operatives were able to secure business due to opportunities identified with the facilitators and co-ordinator support. These included business opportunities in catering, cleaning services, supplying supermarkets with vegetables, supplying linen for hospitals, making garments recycling.Some co-operatives have received DTI Co-operative Incentive Scheme (CIS) funding while other applications are in progress.

Among the successes are:

• Footwear producer EtsangDieta co-operative in Gauteng, which was on contract for a few months of the year only, but which was able to expand its business.
• Maintenance co-operative Siyazumisa which obtained a number of excellent contracts.
• 19 schools feeding programme co-operatives in KwaZulu-Natal which have been contracted by the KZN Department of Basic Education.
• North West co-operative Village Hybrids Entertainment which substantially increased its turnover.

There were also some social benefits including assistance with additional toilets at creches, churches and hospitals and renovation of community halls.