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2011 AFRICA SMME CONFERENCE PROGRAM 13 OCTOBER 2011 GOLD REEF CITY HOTEL, GAUTENG “FACTORS INHIBITTING THE GROWTH OF S

2011 AFRICA SMME CONFERENCE PROGRAM 13 OCTOBER 2011 GOLD REEF CITY HOTEL, GAUTENG “FACTORS INHIBITTING THE GROWTH OF SMEs”. Background. SMME financing institutions faced with a challenge of applications that are not ready – low literacy levels

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2011 AFRICA SMME CONFERENCE PROGRAM 13 OCTOBER 2011 GOLD REEF CITY HOTEL, GAUTENG “FACTORS INHIBITTING THE GROWTH OF S

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  1. 2011 AFRICA SMME CONFERENCE PROGRAM 13 OCTOBER 2011 GOLD REEF CITY HOTEL, GAUTENG “FACTORS INHIBITTING THE GROWTH OF SMEs”

  2. Background • SMME financing institutions faced with a challenge of applications that are not ready – low literacy levels • Market is “flooded” with necessity as opposed to opportunity driven entrepreneurs – due to lack of job opportunities, amongst others • At what point do we measure the SMME financing gap – no conclusive research on the extent of the gap • South Africa relatively has a lot of SMME funding programmes – availability of capital not a key problem • Where is the Problem? 2 3

  3. Funders’ Key Requirements • Character - Jockey • Entrepreneur determines his/her destiny • Viability - Horse • Identify a niche – real opportunity • Equity • Have a some level of commitment – “skin in the game” • Collateral • Khula’s indemnity scheme and other similar interventions provide a solution

  4. Factors Inhibiting Small Business Growth * * Source: FinScope South Africa Small Business Survey 2010

  5. Other Factors • Unity amongst SMMEs (compromise lobbying and bargaining potential) • Access to information (SMMEs are not au fait of intervention available in the market – both public or private • SMME transactions don’t always find their way to the traditional Credit Bureau platforms - credit information of certain categories of SMMEs are not tracked 5

  6. What are we Doing? • SMME practitioners need to develop effective and practical interventions to address each inhibiting factor • Research outcomes should be used for policy formulation and programme development - minimise the level of talk shops • There must be pressure (interest) groups to foster tangible delivery • Minimise duplicating efforts – coordinated approach • SMEs need to be channeled to the right doors (shopping mall experience – one stop shops for SMMEs) Call to Action! 6 3

  7. THANK YOU Don Mashele Cell: 083 679 9498 Email: donm@khula.org.za Website - http://www.khula.org.za

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