Deputy Speaker, job creation and the promotion of small, medium and micro enterprises, SMMEs, are urgent challenges that we are faced with in South Africa.
The government does have several institutions in place to assist SMMEs, including Khula Enterprise Finance Limited, which is mandated to facilitate loan and equity capital to SMMEs through intermediaries. Although Khula guarantees interest rates of 2% under prime to the intermediaries, these intermediaries charge SMMEs anything between 19% and 38% interest. This is stifling the development of SMMEs and is the main reason why we believe that Khula should do away with the "middlemen" and provide financing directly to SMMEs.
Another concern is the lack of risk shown by Khula in their lending practice. This is evidenced by the fact that they have only 4% bad debt at the moment, which is far too low. We believe that Khula should be more aggressive in their lending approach if they want to really promote the interest of small businesses.
The IFP, therefore, calls on Khula to cut out the agents and lend directly to SMMEs at low interest rates, and to do so aggressively, even if it means taking on more risk. SMMEs need all the help that they can get and immediate implementation of these steps will go a long way towards achieving this goal. I thank you.