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Absa opens doors for SMEs Absa opens doors for SMEs

Absa is investing in individuals, communities and enterprises and through its enterprise development programmes is changing the South African business landscape one entrepreneur at a time. Absa is investing in individuals, communities and enterprises and through its enterprise development programmes is changing the South African business landscape one entrepreneur at a time.

Small and Medium Enterprises (SMEs) play a vital role in a vast majority of economies. In South Africa, SMEs employ almost 60% of the employable population - with over 12 million livelihoods relying directly on SMEs. Small and Medium Enterprises (SMEs) play a vital role in a vast economies. South Africa, SMEs Absamajority Bank Ltdof(Absa), whollyInowned subsidiary of employ Barclays almost 60% of the employable population - with 12 million Africa Group member of Barclays, recognises the over importance livelihoods relying directly on SMEs. of small businesses as catalysts for economic growth and job creation. Absa Bank Ltd (Absa), wholly owned subsidiary Barclays As a responsible corporate citizen, Absa lends itsofsupport Africa member the importance to the Group national agendaoftoBarclays, promoterecognises a thriving SME sector. of small businesses as catalysts for economic growthofand While financial support is a key driver of the success thejob creation. SME, access to markets and building business skills are also As a responsible corporate citizen, Absa lends its support significant challenges to address. to the national agenda to promote a thriving SME sector. While financial development support is a key driverfrom of the success The enterprise offering Absa aimsof tothe open SME, to markets and building aremarkets, also doorsaccess for SMEs by providing access inbusiness three keyskills areas: significant challenges to address. funding and non-financial support (business support). The enterprise development offering from Absa aims to open Access to markets doors by is providing access inobstacle three keyfacing areas:SMEs markets, Accessfor toSMEs markets a more pressing funding and to non-financial support support). than access funding. The market(business exists, but the linkages

don’t. Access tobuyers, markets Corporate for example, in terms of preferential Access to markets a more pressing obstacle facing SMEs procurement, face is the challenge of locating and identifying than access funding. And The the market exists, butstruggle the linkages suitable SMEtosuppliers. SMEs in turn don’t. with accessing these corporates in order to secure supplier Corporate contracts. buyers, for example, in terms of preferential procurement, face the challenge of locating identifying Absa’s Procurement Portal – a virtual marketand place – creates the suitable suppliers. SMEs inSMEs turn struggle linkages SME between buyersAnd andthe suppliers. on the portal are with accessing these corporates in orderusing to secure supplier validated and verified. They are located various searchable contracts. fields such as geographic location, size or BEE status. To date Absa’s Procurement Portal virtual market place – creates the there are 30 000 SMEs and–3a500 corporates actively using the linkages portal. between buyers and suppliers. SMEs on the portal are validated and verified. They are located using various searchable fields such is aspart geographic size or BEEtostatus. To date The portal of Absa’slocation, value proposition go beyond there areand 30 000 3 500 corporates actively using the banking openSMEs doorsand by addressing a primary obstacle portal. facing SMEs. Furthermore, Barclays Africa’s presence in 12 The portal is part of Absa’s value proposition to go beyond banking and open doors by addressing a primary obstacle facing SMEs. Furthermore, Barclays Africa’s presence in 12

countries across the continent creates opportunities for these entrepreneurs and emerging small businesses beyond South Africa’s borders. countriestoacross the continent creates opportunities for these Access funding

entrepreneurs and emerging small(or businesses beyond South Considering that five out of seven 80%) SMEs in South Africa’sfail borders. Africa in their first two years of operation – mostly due to cash-flow problems – it is clear that improved financial Access to funding support will empower more SMEs to realise their ambition, and Considering five out of sevenin(or 80%)Africa. SMEs in South contribute tothat sustainable growth South Africa fail in their first two years of operation – mostly due to cash-flow problems – it is clear that improved financial in In addressing SME challenges Absa needs to be innovative support will empower more SMEs to solutions. realise their ambition, and its approach to providing pioneering It can advance contribute sustainable in South valid Africa. funding to to SMEs that havegrowth been awarded and viable contracts. Cash-flow principles are the primary lending drivers In challenges Absaorneeds to be innovative in as addressing opposed toSME traditional collateral security-based lending. its approach to providing can advance Absa has committed R250pioneering million persolutions. annum inItnon-traditional funding to SMEs that have been awarded valid and viable lending aimed entirely at the SME sector in South Africa. This is contracts. are the primary lending in order to Cash-flow fund SMEsprinciples that typically would not meet thedrivers normal as opposed to traditional lending criteria required bycollateral banks. or security-based lending. Absa has committed R250 million per annum in non-traditional lending at the SMEAbsa sectorhas in South This is Over andaimed aboveentirely the R250 million, createdAfrica. specialised in order to fundfunding SMEs that typically not meet the normal non-traditional solutions to would assist SMEs: lending criteria required by banks. • The Women Empowerment Fund provides credit to women entrepreneurs who have the skills and demonstrable Over and above the R250 has created specialised potential to service theirmillion, debts. Absa The funding is available for non-traditional funding to assist SMEs: all women SMEs whosolutions do not have sufficient security to start • The Empowerment Fund provides creditcriteria. to women theirWomen businesses under ‘normal’ banking lending whoCredit have the skills and demonstrable • entrepreneurs The Development Fund in partnership with USAID. potential debts. The funding issecurity available This fundto is service offered their to SMEs with insufficient forfor all women SMEs who do not have sufficient securityby to astart existing business and start-ups. The fund is backed their 50% businesses guarantee. under ‘normal’ banking lending criteria. •• The Credit to Fund partnership withbeen USAID. The Development SME Fund is offered BEEinSMEs who have This fundcontracts is offeredor totenders SMEs with insufficient security fordoes awarded by Government. The fund existing business and start-ups. The fund is backed by a not require security. 50% guarantee. • In partnership with the French Development Agency, Absa • The SME an Fund is offered to BEE in SMEs who have been of up can offer exclusive incentive the form of a rebate awarded contracts or tenders byThis Government. The driving fund does to 7% of the total loan amount. is for projects not require security. • In partnership with the French Development Agency, Absa can offer an exclusive incentive in the form of a rebate of up to 7% of the total loan amount. This is for projects driving

Absa Bank Limited Reg No 1986/004794/06 Authorised Financial Services Provider Registered Credit Provider Reg No NCRCP7

Absa Bank Limited Reg No 1986/004794/06 Authorised Financial Services Provider Registered Credit Provider Reg No NCRCP7

energy efficiency and renewable energy. • The Thembani International Guarantee Fund supports business with a minimum of 51% BEE business in South and Southern Africa. The fund offers 50% and 75% guarantees energy to SME efficiency clients. and renewable energy. • The Thembani International Guarantee Fund supports business with a minimum of 51% BEE business in South and Access to non-financial support Southern Africa. The fund offers 50% 75% guarantees Another critical challenge facing SMEs is and structural in nature. to SME clients. SMEs fail, not for lack of technical ability, but rather because of a lack of general business skills.

Access to non-financial support

Another SMEs is structural nature. Absa hascritical seven challenge Centres offacing Entrepreneurship locatedinacross the SMEs fail, notthe for purpose lack of technical ability, but rather because of country with of providing a support environment a of general business tolack SMEs. The centres are askills. perfect example of private and public sector cooperation that have led to the costs traditionally Absa has seven Entrepreneurship located across the associated with Centres starting of and running a business being reduced. country theinclude purposeeverything of providing a support environment Serviceswith offered from providing access to to SMEs. The centres are a perfect example of private and infrastructure (computers and printers) and meeting rooms, public sectortraining cooperation that on have led toissues. the costs traditionally to providing seminars various Topics range associated starting and running a business reduced. from SARS with and labour regulation to financial skillsbeing training. Services offered include everything from providing access to Mentoring services are also provided. infrastructure (computers and printers) and meeting rooms, to providing training seminars variousAbsa issues. Through non-financial supporton offering, hasTopics helpedrange over from SARS anddevelop labour their regulation to financial 42 000 SMEs businesses in theskills past training. year through Mentoring servicestools, are also provided. training, business seminars and networking. By offering non-traditional support, the Centres of Entrepreneurship will Through non-financial support offering, Absa has helped bring more small businesses online and make it easier forover 42 000 SMEs develop theirand businesses in the past year through entrepreneurs to establish grow their businesses. training, business tools, seminars and networking. By offering non-traditional support, theand Centres of Entrepreneurship Access to markets, funding non-traditional support iswill a bring more small online and make easier for complex recipe forbusinesses a successful business. Like it any masterpiece entrepreneurs to establish andextra growdetermination their businesses. it takes time, effort and some to get the ball rolling. By investing in individuals, communities and enterprises, Access to markets, funding and non-traditional support is a Absa, through its Enterprise Development programmes, complex recipe a successful business. Like any masterpiece is changing the for South African business landscape, one it takes time, effort and some extra determination to get the ball entrepreneur at a time. rolling. By investing in individuals, communities and enterprises, Absa, its Enterprise Development programmes, 0860through 040 302 / absa.co.za is changing the South African business landscape, one entrepreneur at a time.

0860 040 302 / absa.co.za


PSM December/January Edition 2016/2017