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Corporate SA must actively support SMMEs

Johannesburg, 21 Jul 2004
Read time 2min 30sec

Listed IT company Business Connexion has come out in support of government`s aggressive drive to make funds available to SMMEs. However, if transformation and black economic empowerment is to be successful, corporate SA must actively support SMMEs.

This is the opinion of Bridgman Sithole, group executive with SA`s largest black-empowered ICT company, Business Connexion. "The Gauteng and Western Cape Provincial Governments recently launched schemes to fund SMMEs," says Sithole. "The Gauteng Provincial Government announced an initiative called Blue Catalyst, which makes funds available to technology and knowledge-intensive businesses established in Gauteng. A total of R50 million has been committed, with a promise of more to be raised.

"Their counterpart in the Western Cape announced that it had entered into a partnership with Absa to launch a financing scheme for struggling enterprises. A potential maximum of R56 million will be made available to businesses in the region."

Sithole says that if SA is to transform its entrepreneurial spirit into real business success and economic growth, entrepreneurs must be given access to non-traditional lending alternatives. "Limited access to finance has been a significant limiting factor in the creation of SMMEs for many years," he says.

"While government has recognised and acknowledged the importance of building an entrepreneurial culture, it has been virtually impossible for bright young people, particularly PDIs, to access start-up capital or to gain access to additional funding."

He says access to finance, however, isn`t enough. "Corporates must actively support start-ups. Don`t limit your support to established BEE companies with whom you have an existing relationship. Broaden your network of suppliers/partner companies and give others a chance. In this way you are supporting emerging SMMEs."

He says that in the past aspirant entrepreneurs have had limited opportunity. "No matter how good an idea, little known people with no track record have had no access to funds and have had to fight hard to gain access to business." He says this has forced many people to accept positions in the more comfortable corporate world.

He says the development of industry charters, which call on business to support affirmative procurement, collaborative business ventures and the transfer of skills, will add impetus to the drive.

He praised Absa for partnering with government and urged other corporates to follow its lead. "Corporates have a responsibility to support the development of an entrepreneurial society and should set aside funds to drive SMME development.

"This may be through matching a government contribution - as was the case with Absa - or investing a percentage of their CSI budget to fund development. By doing so, their corporate investment rand will be invested in a way that will support economic growth."

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Fleishman-Hillard SA Kim Hunter (011) 548 2018
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