What the 2024 merger of SEDA and SEFA into SEDFA means for small enterprises seeking development and finance support.

dgm is an independent integration partner for osFoundry — it is not affiliated with osFoundry’s maker (OS LLC) and has not yet completed an integration project for any client.

In 2024, SEDA and SEFA merged into the Small Enterprise Development and Finance Agency (SEDFA). This explains what the merger means for small enterprises seeking development and finance support.

What changed

  • SEDA (development), SEFA (finance) and the Cooperative Banks Development Agency merged into a single entity, SEDFA, created under the National Small Enterprise Amendment Act, 2024.
  • SEDFA commenced operations on 1 October 2024 as a State-Owned Company, with the State as sole shareholder.
  • One application now spans the three former mandates — applicants no longer apply separately for finance and business support.
  • SEDA and SEFA are now legacy brands of the merged entity; refer to SEDFA.

What it means for an AI project

  • SEDFA support is for the small enterprise itself, not for buying an off-the-shelf AI subscription on its behalf.
  • A small enterprise can adopt a tool like osFoundry as part of its own operations, but SEDFA finances the enterprise, not the software.

The honest framing

Public support in South Africa funds the company’s own research, development or innovation, or gives it a tax break — it does not buy an off-the-shelf AI subscription. The section 11D R&D tax incentive offers a 150% deduction on approved R&D, requires pre-approval by the Department of Science and Innovation and has been extended to 31 December 2033; the Technology Innovation Agency (TIA) and the Small Enterprise Development and Finance Agency (SEDFA, formed in 2024 from SEDA and SEFA) fund innovation and small enterprises; and DTIC sector programmes such as the Global Business Services (GBS) incentive and the automotive APDP support specific industries. Separately, Broad-Based Black Economic Empowerment (B-BBEE) is a procurement and empowerment scorecard, not a grant: a supplier’s B-BBEE level affects how many procurement points its customers earn, so it shapes who buyers prefer rather than paying for software. dgm is not a registered or accredited provider of any of these programmes; it can advise a beneficiary or act as a subcontractor.

Where dgm comes in

dgm is an independent integration partner that helps organisations in South Africa adopt the osFoundry platform — from identifying the first practical use case, to setting it up, to connecting AI to the systems you already run. dgm can help identify which parts of your activity might qualify — without committing that any incentive will be granted. dgm operates separately from osFoundry’s maker (OS LLC) and has not yet completed an integration project for any client, so everything above is a proposed service rather than a delivered outcome. If you would like to weigh up a practical first step, dgm would be glad to think it through with you. Arrange an introductory call with dgm.

This article is general information and is not legal, financial or tax advice. Incentives, tax rates and regulations change; always confirm the current position with an official source (SARS, the Department of Science and Innovation, the dtic, the Information Regulator, the FSCA or the relevant authority) or a qualified adviser before you act.