SEDA boss takes personal loans to pay staff salaries

In a shocking disclosure, the CEO of eThekwini’s Small Enterprise Development Agency (SEDA), Protas Madlala, says he was forced to take several personal loans to keep the organisation afloat.

“Yes, it’s true. I recently took out a personal loan to ensure staff salaries were paid on time, and then took another loan after our electricity was cut off due to non-payment. The livelihood of 60 small businesses on our premises is also in jeopardy if we don’t have electricity, so I had to do something,” Madlala told News24.

“We have not received funding for the new year from national coffers, and I could not just expect my staff and those who depend on our services to be left in the lurch. Something had to be done.”

The issue, he explained, was the delay in renewing the Memorandum of Understanding (MOU) with SEDA nationally, which left the organisation without renewed funding to cover their monthly operational costs.

“Our offices see people from all over the province due to our high success rates. We do this with limited funding from eThekwini Municipality, which supports us with R3m annually, and SEDA national with R900 000… quarterly.

“One of the biggest challenges we have is that, despite the increase in our workload, funding has not been increased. We even approached provincial government to assist, due to our services benefitting those out of eThekwini as well, but this request was declined, leaving us with a huge shortfall.

“The moral dilemma is we can’t chase people away, as not all SEDA branches are interested in start-up companies, while we have had many success stories in assisting these.

“It pains our staff and clients when they hear we don’t have money to help them, yet they read in the media about government departments splashing millions of rand over one or two days on social events.”

‘Minister has never come to our offices’

Madlala said his staff had not received salary increases or bonuses for three years in a row, yet they remained committed.

“Just this week, we had five buses of students visiting us, yet we had to do something un-African when we could not even offer [them] refreshments. I really wish government could see the work we do and assist in increasing, or at least provincial government contributing to, our funding in some way.”

A staff member at SEDA, who did not wish to be named, also raised concerns about the funding challenges of the organisation.

“It’s unacceptable that our CEO has to take out a personal bank loan to pay our salaries. Government is quick to dish out large sums of money for events which are difficult to measure in terms of impact, while we are struggling to help more people who desperately need our assistance to become economically independent.

“We have been trying to get Small Business Minister Lindiwe Zulu to visit us, yet she has never come to our offices to see the hard work we do.”

Small Business ministry spokesperson Linton Mchunu told News24: “The minister is committed to resolving issues, especially as it impacts on small businesses, and will make time to visit SEDA when she is in Durban to address the challenges experienced by the organisation.”


Read: How radical transformation will impact small businesses

Must Read

Partner Content

Show comments

Trending Now

Follow Us

SEDA boss takes personal loans to pay staff salaries