Commercial banks` failure to see past red tape and procedure delays the progress of small and medium enterprises (SMEs), said Joel Sekoala, business development manager at Mthombo IT Services.
He was speaking last night at the ForgeAhead African Achievers business forum, which examined the challenges and successes involved in investing in and developing SMEs in the ICT sector.
Sekoala said commercial banks are run by people with limited understanding of entrepreneurship and business, making it difficult for SMEs to access funding. He added that government institutions adopt the same red tape measures.
"Commercial banks and government institutions are sceptical in investing in what they deem to be risky portfolios, and they neglect people who don`t have the resources, but have great and innovative ideas. Thus SMEs fail before they begin.
"Government institutions and commercial banks need to focus on research done on the viability and feasibility of proposed ventures and less on procedures and red tape," stated Sekoala.
Malikhanye Mabena, projects executive at Mthombo IT Services and keynote speaker, said: "Although challenges of access to funding and high telecoms cost continue to plague SMEs, it is crucial for SMEs to invest in partnerships and networks so they can leverage these relationships.
"Business is not conducted in a vacuum. The only growth that is going to be achieved is that based on solid partnerships."
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