Chapter 6 Church and small business: building the community economy
6.3 Promotion of small business development and support in Tswaing
6.2.3.4 Availing local market opportunities
Local Government could also be approached by the church to consider planning for periodic markets where small business owners could sell their products. Government could also use these for service delivery like delivery of social service food parcels, old age pension pay out points or mini home affairs service points.
transfer of skills. These mentoring partnerships would meet the gap of shortage of business management skills.
Another support function would be that of forging partnerships between small scale farmers and established farmers for those established farmers who would like to make their farming operation available on a business basis for purposes of a joint venture with small farmers.
The partnership would also assist those farmers who would be interested in leasing their land, (like the elderly who no longer have energy to farm or the youth who own land but have no interest in personally working the land), with a view to development projects. These partnerships would not be limited to the agricultural sector but would include clothes manufacturers as well as those who would like to venture into the construction industry.
The church initiated agency would act as a pool of consultants who could make a contribution in terms of technical, economic, financial, marketing or management expertise.
The Ecumenical Church would use its connections with their urban counterparts, through their District Bishops and Synods to find more experts who would be accountable to and willing to learn from the local community.
The process of establishing a development agency will follow that of an Asset based approach namely, convening a meeting by the local Council of Churches to assess interest in the vision; second, for discussion of ways of locating and mobilizing all institutions in Tswaing’s selected areas to be involved in one way or another in the formation of the suggested agency; thirdly, to deliberate on how to capture local institutions for SMME development, especially for community members who will not be directly involved with the running of the agency.
The Church as a co-learner would, through the agency, also act as a conduit for funds. Funds would be sourced from government funding agencies, especially in cases where huge capital is needed for small businesses. In support of SMMEs and to fill in gaps that exist in terms of lack of access to funding, and absence of financial institutions from the community, the church would encourage the community to enhance the power of savings clubs; establishment of a local bank in consultation with big business and assist the community towards investing in the local economy. The church will thus, together with the community be learning to be involved in the financial world in a manner that will grow local economy.
6.3.1 Creation of alternative credit institutions
Ewert (1992:11) suggests that the establishment of a chain of small credit unions would provide credit for potential entrepreneurs much as they would provide a vehicle for savings.
However, contrary to Ewert Davies (1998:28) alludes to negative results that could be brought about by access to credit for small business owners. He claims that access to credit would increase the size of the business. This rise would in turn give rise to more production and a quest for more profit. Wherever production is done for profit, Davies claims that it necessitates reduction of production time and thus manual work becomes unnecessary as machinery becomes necessary. Yet Davies’s point is a minority opinion. It is clear from this research that access to credit is a crucial area of weakness in the current situation in Tswaing, and that community level credit institutions are crucial for the lifting of SMMEs from the
‘survivalist’ mode.
6.3.2 Strengthening/multiplying Savings Clubs
A problem of lack of access to finance was identified. The poor have complex livelihood and financial strategies that contribute towards building local economies when recognized.
Savings clubs are some of such strategies. From own experience and experience of relatives,
(The researcher was a member of a savings club whilst working in Thaba `Nchu). Savings clubs are semi-formal groups of individuals who come together with an agreed purpose of saving money. Membership is voluntary. The intention of forming and strengthen such existing clubs would be to promote discipline in saving money thus reducing vulnerability of SMMEs to financial crises.
In such Savings clubs money could be saved for weddings, funerals, sudden loss of employment or other emergency needs and could be used as start- up capital for business. It could be in these clubs that members could also learn how to budget whilst learning to build a sense of community. The latter would be an equivalent of what Botes and Abrahams (2008:118) describe as an investment in social capital. Social capital refers to “those social resources (networks, membership of groups, relationships of trust, access to wider institutions of society) upon which people draw in pursuit of individual livelihoods”.
Meetings are held weekly or monthly, depending on what the membership decides. It is in these meetings that committee members would be elected. There could be sharing of problems encountered in the running of their various businesses which could help members to have a sense of identity and would allow for social mobilization as they form solidarities.
Savings clubs could also be used for networking of small business owners from the same sector or between sectors.
The formation of these savings clubs could differ according to need. It could be one or two members who see such a need and would either speak to others who might be interested or make group presentations. Numbers in each group would vary from ten to twelve. Should there be more people wishing to join after the maximum number has been reached, they be would encouraged to form another savings club.
Rules that will govern the club will be agreed upon by all members and decisions made jointly. The group would decide jointly how money would be brought to the meeting, although some groups usually allow a representation if a particular member is held up and unable to come. Money will counted in everyone’s presence to encourage accountability, where all members can also view collection books, and do reconciliation of the bank statements. The number of signatures in the bank account will be determined by members.
Members may opt to have training sessions on various topics like basic financial management or life skills.