2005 Winner
Winners:
Western Cape Province, South Africa
2005
Publication:
Impumelelo Innovation Award Trust
Sponsored By:
Impumelelo Innovation Award Trust
Jurisdiction:
South Africa

Description: The UTHANGO Enterprise project (est. 2003) is located in the community of Masiphumelele, an informal settlement on the outskirts of Noordhoek Valley, Cape Town and has local economic development (LED), and access to economic opportunities as driving forces. Funding is provided by the Rotary Club of Claremont (NPO) and the City of Cape Town (CCT), while FEBDEV (a NGO) implements and manages the project. Beneficiaries of the project include micro-entrepreneurs based in Masphumelele and Ocean View. Beneficiaries enter the programme through an adjacent FET (False Bay College) institution as graduates with entrepreneurial potential and marketable products and services or from the community as micro-enterprise owners in need of assistance to grow. People with business potential lack the support to make their enterprises sustainable. Understanding the micro-enterprise and informal business landscape and addressing its needs systematically, form the cornerstone of the project. The integrated components of the project include access to Infrastructure, Micro-Enterprise Funding, one-on-one Business Coaching, Business Services, Networking and Market Development and Access, as well as life skills development and technical training if required. These are offered in a dynamic model, bringing various partners and local government directorates together in phased implementation: Phase 1 was based on Appreciative Enquiry in the community, where participants are encouraged to identify ‘what works' in their business practices. Phase 2 saw the establishment of business hives on the premises of the FET institution to absorb emerging entrepreneurs. Phases 3 and 4 emphasised the business growth of both graduates' start-up businesses and micro-enterprises from the community itself, combining these into a dynamic learning network for entrepreneurs called the Uthango Association. Phase 5 focuses on the construction of an Enterprise Park at the entrance of Masiphumelele to create a business resource and innovation's hub. The final phase emphasises the business development strategies of beneficiaries and the project itself towards sustainability.

Innovation: For the first time in South Africa, we are able to visually ‘map' the activities of informal micro-enterprises and home-based businesses on a Geographical Information System and Business Development Needs Analysis chart to assist in planning for LED interventions. Unemployed youth are trained in how to implement the audit and capture data for analysis. Graphic reports inform government departments, community-based leaders and training service providers. Rotarians with specific skills mentor prospective entrepreneurs.

Effectiveness: Twenty-four businesses have been involved in intense mentorship. Of these 92% have showed a measurable increased income of more than 50%. 83% have increased market demand for their products. 96% of these beneficiaries have opened bank accounts and used the facility to manage their finances more effectively. 88% showed increase self confidence, while 58% showed a measurable improvement in living conditions, ranging from building an own house, placing children into a school of choice or employing all family members. The combined income of the beneficiaries (R 1 375 200) exceeds the grant (R889 000).

Poverty Impact: Many community members from Masiphumelele feel displaced in urban Cape Town and are discouraged in their search for employment. Similarly, the community representatives of Ocean View has often expressed that they are ‘forgotten' and have to fend for themselves to get ahead. The project addresses the lack of opportunities and the 24 micro enterprises that they support indicate the need for business services and support. Through the beneficiaries, the number of sustainable jobs created in the economy amounts to 72 full time positions.

Sustainability: The Rotary Club assisted with seed funding to the amount of R2 million, the CCT allocated land on the premises of False Bay College for Business hives to accommodate skilled graduates that emerged as entrepreneurs. The project is managed by FEBDEV and is in the third year of its five-year lifespan. After five years, mechanisms will be in place for all Association Members to be sustainable. A challenge to sustainability is to convince traditional funding partners to invest in micro-enterprise development over a longer period for more effective social gains. Another challenge is to continuously identify market demand and innovate new products/services together with beneficiary emerging entrepreneurs.

Replication: The model is a best practice in micro enterprise development and can be replicated. Not only is it possible to replicate infrastructure, business services, venture capital, training access and business coaching, it is possible to use principles such as market development and implement similar initiatives linked to market opportunities. The role of local government is indispensable in this regard. Without this level and nature of support, the project will not be replicable in any other area.

Related Topics