Absa aims to raise more than a billion rand to support emerging small and medium enterprises (SMEs) in South Africa, and later across various markets where it has operations.
This is part of the bank’s ‘Shared Growth’ initiative announced earlier in July 2016, through which the bank aims to use its assets and resources to grow and develop the societies where it operates while growing its business.
According to KeaObaka Mahuma, Head of Enterprise and Supply Chain Development at Barclays Africa, the funding will be raised from a number of sources, including the bank’s own balance sheet. The fund will predominantly target existing SMEs linked to the supply chains of private and public sector corporates.
“The fund represents the bank’s commitment to developing and growing viable SMEs, which have come to be widely acknowledged as engines of economic growth and development. The fund will assist in improving access to finance for SMEs” says Mahuma.
In addition to these funds, Absa has in conjunction with a number of partners created a suite of ‘Business Development’ support solutions to assist SMEs, as they need more than just funding to succeed as they also have other challenges.
“SMEs experience a high failure rate owing to a lack of business and financial management skills. Accordingly, most of the funding advanced under Absa’s enterprise and development programmes are linked to a non-financial support packages to improve the business owners’ management skills and to provide them with networking opportunities,” adds Mahuma.
Small businesses also often struggle to penetrate markets for their products and services. In this regard, Absa in conjunction with SCNet established a procurement portal – a virtual marketplace that links SME suppliers with blue-chip companies and government bodies. To date there are more than 42 000 SMEs and 5 900 corporate buyers actively using the portal.
