Sept 2006



Are you unemployed and there are others like you? Put on a united front and the Department of Trade and Industry can help you to start your own business. But, it can only happen if you draw up a plan for a business you will run jointly with your partners. It is called a co-operative and this is how you do it.

Incentive Scheme
Before applying for money from the department, you must register the co-operative. The Department started the Co-operative Incentive Scheme last year to make money available to co-operatives in the Second Economy. 
"By helping to develop and promote co-operatives, the Scheme is a way of improving poor and unemployed people's lives," said Patience Mbewana of the Co-operatives Development Unit in the Department of Trade and Industry. The Co-operative Incentive Scheme supports the government's plan to cut unemployment by half in the next eight years.

Existing co-operatives
Mbewana said the Co-operative Incentive Scheme would also benefit existing co-operatives. The Department will grant a cooperative 90 per cent of the funds it needs to run its business. Any cooperative that successfully applies for money will qualify for not more than R300 000. The Co-operative Incentive Scheme aims to ensure that:

  • poor people get money to start their own co-operatives;
  • co-operatives owned by previously disadvantaged people, for example black people, women, disabled people and youths, become part of the formal economy;
  • the economy grows faster to support job creation programmes;
  • co-operatives play an important role in our economy and in supporting black economic empowerment. Funds from the Co-operative Incentive Scheme will only be given to cooperatives that:
  • are registered in South Africa under the Co-operatives Act 91 of 1981;
  • focus on things like manufacturing products or goods, trading, services and farming.
  • be able to prove that members hold regular meetings to discuss their business;
  • prove that there are markets where their products or services can be sold.

Important to register
A co-operative must be registered so that it can be recognised and run as a lawful business. A co-operative can be registered at the Companies and Intellectual Property Registration Office, located within the Department of Trade and Industry. 

- Justice Mohale

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