Despite banks and other financial institutions’ ‘hostile’ attitude towards South African small businesses in terms of funding, other sections of the private sector have begun to step in to help develop these entities, as the country seeks to curb its high unemployment levels.
Business Partners Limited has announced today that it has earmarked more than R1 billion (about US$101 billion) for the advancement of Small and Medium Enterprises (SMEs) for the upcoming 2013/2014 year.
Business Partners Limited executive director Christo Botes said this amount will serve to further develop the SME sector by financing their undertakings and providing business infrastructure, advice and after-care service.
This, he said, was in an effort to grow and foster the local economy and develop business within South Africa. Business Partners Limited is a specialist risk finance company for formal SMEs.
There are close to two million officially registered SMEs in South Africa, which contribute about 40% of the country’s jobs. But these entities face numerous challenges, ranging from funding to lack of infrastructure, state corruption and bureaucracy, and government’s inflexible and rigid laws.
A Moon of the South investigation also found that many SMEs, whose owners are politically well-connected grow and prosper faster that their ‘ordinary’ counterparts.
SMEs are key drivers of wealth and the economy in South Africa, and in order to improve the country’s economic situation, these businesses need to be supported, Botes said in a statement.
“Despite the challenging economic environment, we are finding that South African SMEs are still growing and that there is still an appetite for SME finance,” he said.
“For this reason we are aiming achieve finance approvals of over 1 billion over the financial year.”