Ndabeni-Abrahams Unveils Major Interventions to Strengthen SA’s Cooperatives

South Africa’s cooperatives are underperforming when measured against their counterparts in other countries, prompting the Minister of Small Business Development, Stella Ndabeni-Abrahams, to announce a range of targeted interventions aimed at enabling the sector to thrive. Speaking at the International Day of Cooperatives event at Sun City Resort, the Minister outlined a multi-pronged plan to improve access to finance, cut bureaucratic red tape, open market opportunities, build business skills, and make cooperatives more bankable.

Cutting Red Tape and Improving Support Systems

Ndabeni-Abrahams emphasised the urgent need to reduce administrative barriers, starting within the Small Enterprise Development and Finance Agency (SEDFA) itself.

“We must cut the red tape for co-operatives. This includes our own red-tape within SEDFA to reduce the turnaround times for those applying for support,” she said.

The Minister revealed that new digital platforms are being developed to simplify registration, ensure compliance, and give cooperatives easier access to financial and non-financial support. Additionally, alternative credit rating systems will be introduced to help cooperatives without traditional collateral secure funding.

Tackling Market Access Challenges

South Africa’s highly concentrated economy presents significant barriers for new market entrants, including cooperatives. To address this, the Department of Small Business Development is partnering with public and private stakeholders to co-create markets for small enterprises.

She noted that cooperatives often miss out on Enterprise Supplier Development opportunities and are underrepresented in localisation initiatives within corporate and government supply chains. The upcoming Public Procurement Act regulations, which establish a unified framework for procurement across all state entities, are expected to open doors for cooperatives by promoting preferential procurement and integrating technology for efficiency.

Skills Development for Business Competitiveness A major focus will be on equipping cooperative members with the business acumen needed to compete in diverse markets. Through SEDFA, more than 120 incubators and digital hubs have been established to provide training and mentorship, and partnerships with Sector Education and Training Authorities (SETAs) will bring in commerce graduates to strengthen business skills delivery.

“Co-operative members must be business smart, innovative and entrepreneurial. They are competing with private businesses and must deliver quality products and services at the right price,” the Minister said.

Ensuring Bankability and Governance One of the sector’s weaknesses, Ndabeni-Abrahams noted, is poor compliance and corporate governance. The revamped Co-operatives Development Support Programme now includes strong business development components alongside financial support to address this gap.

For 2025, government will disburse R61.368 million directly to cooperatives via SEDFA, with allocations to each province:

• Eastern Cape – R7.98 million

• Free State – R7.36 million

• Gauteng – R6.14 million

• Limpopo – R8.59 million

• Mpumalanga – R5.52 million

• Northern Cape – R4.91 million

• North West – R7.36 million

• Western Cape – R6.14 million

Additional Funding Opportunities Cooperatives can also apply to other SEDFA-administered funding streams, including the Development Fund (R792 million this year, R2.95 billion over the MTEF) and the Township and Rural Entrepreneurship Programmes (TREP) (R843 million in 2025).

Planned provincial allocations from the Development Fund for 2025/26 target rural economies, with Eastern Cape and Limpopo each set to receive R118.8 million, KwaZulu-Natal R102.96 million, and other provinces receiving proportionate allocations.

Fund of Funds and Cooperative Banking Growth The department is also advancing the MSMEs and Co-operatives Funding Policy, which includes a proposed Fund of Funds to streamline access to diverse financing sources. Collaboration with the Department of Trade, Industry and Competition (dtic) on a R100 billion Transformation Fund is underway, with a focus on ensuring cooperatives are “capital ready” to benefit.

Further plans include scaling up cooperative banking through the Cooperative Banks Development Agency (now part of SEDFA), establishing a movable asset registry, and implementing an alternative credit rating system to widen financing options.

Ndabeni-Abrahams concluded by stressing that building a competitive cooperative sector requires coordinated support, investment in people’s skills, and strategic partnerships that connect cooperatives to sustainable markets.