The Johannesburg office of the National Empowerment Fund (NEF) experienced low levels of investment activity in its 2003 financial year.
During that time, the development finance agency invested in only one company. It had a few financial approvals aimed at backing small businesses, but disbursed few of the funds at its disposal.
During 2004, the NEF invested in only four companies, inviting strong criticism for its poor investment record.
However, by October 2005, during the present financial year, the financier had approved more than R217m to fund start-ups, and more than R280m was awaiting approval.
Another development finance agency, Khula Enterprises, has weathered some lean years. Many predicted it would fail but it has started to fulfil its role as a provider of development funding.
This became evident when the latest figures were released in its 2005 annual report. Approvals for the 2005 financial year lifted 30,4% to R493,7m and disbursements lifted 15,5% to R323m.
The Industrial Development Corp (IDC) has had financing and development approvals of R3,8bn. Just more than 70% of its approvals pertain to small and medium-sized enterprises (SMEs), and 83% to black economic empowerment.
Nearly 50% of the IDC's existing clients are SMEs with total assets of less than R30m. Approvals for SMEs amounted to 72% of the total number of approvals.
Is this evidence of an SME boom? Yes - of sorts. The new and increased investments and approvals at the NEF, Khula and the IDC indicate that SA's moribund small business environment may be rejuvenated.
Go to any of SA's main cities and you'll see many SME success stories. Watch public broadcaster SABC1 in the afternoons and you will find programmes about people who run flourishing small businesses in the townships.
The funding agencies all have videos they are keen to show to the media. These are mostly stories about successful SMEs they have helped finance.
Even SA banks have got something to say about the people they have helped start their businesses.
And Business Recovery Services (BRS) - a tracing company based in Johannesburg and formed two years ago - has given new meaning to tracking down the beneficiaries of unclaimed pension fund money.
Last year, the IDC started roadshows aimed at teaching people how to draw up business plans. The roadshows were also an effort to encourage people to apply for financial back-up from the NEF, Khula and the IDC.
Given these developments, there is no doubt that the SMEs have got the necessary support and this is set to continue for some time.
SA, a promising emerging market, has long battled to kickstart small business ventures. One of the reasons for the slow take-off of SMEs was the failure of the financing agencies to get organised and deliver on their mandates.
All of them have since been restructured and have begun to deliver. The complex social and economic climate in which they operate also required re-examination, says the IDC.
Government's continued efforts to boost business creation through these agencies are encouraging more people to enter the world of business.
Official figures show that SA's economy has been growing at an annualised 4% or higher in every quarter since the beginning of 2004. But the present economy has not created enough new companies to replace the jobs that were eliminated by sanctions and the depressed economy of the early 1980s.
Unemployment is estimated at 26,5% and few new jobs are being generated. However, it looks as though the agencies will alleviate this problem. For instance, IDC chairman Wendy Luhabe says the IDC has, through its financing activities, assisted in creating 16 700 jobs.
