In recognising the invaluable role of SMEs in the SA economy, Nedbank has implemented various initiatives to ensure their sustainability

Micro, small and medium-sized enterprises play an important role in building and growing the economy. SMEs also crucially engage in job creation – an essential component of building sustainable communities, which in turn impacts on the social and economic landscape, according to Nirmala Reddy, senior manager of Nedbank business banking enterprise development. This, says Reddy, is demonstrated by the fact that SMEs are expected to account for 90% of new jobs in SA by 2030 (according to the NDP). Over and above this SMEs help maintain a dynamic and competitive market place. ‘SMEs are far more agile and flexible when it comes to sustainability in an ever-changing market place. They also play a pivotal role in areas of innovation and product development,’ she adds.

As a bank committed to small businesses, Reddy says Nedbank supports small-business owners by allocating a dedicated relationship banker who is backed by a team that understands the needs and challenges of small business. ‘This banker’s role is to assist and guide the business owner with their financial decisions, equip them with the right tools to manage and grow their business, and to reduce their administrative burden. These tools include banking products specifically designed to meet the needs of small-business owners, as well as value added services through Banking & Beyond,’ she says.

Nedbank, through enterprise development, supports qualifying small businesses to become operationally and financial sustainable. The augmenting of this non-financial support has proven to be invaluable in providing a platform for the SME to embark on growth strategies, product development, diversification and other such strategies that would otherwise be a risk if they were not in this supportive environment.

Elaborating on Nedbank’s range of solutions that are tailored specifically to provide easier access to finance, to accommodate the business and the business owners’ needs, Reddy says financing options extend to term loans; overdrafts; debtor financing; vehicle and asset finance; and property finance. ‘While we are seeing fewer businesses being born in comparison to 30 years ago, the good news is that business failure rates are in a long-term decline. The rate at which businesses fail has reduced by 30% since 1977,’ she says. ‘We at Nedbank believe this is due, in part, to the superb business incubators available today. More important is the collaboration between the business incubators and the financial sector. This creates an enabling environment for the business.’ Entrepreneurs surveyed for the annual Global Entrepreneurship Monitor believe the aspects of entrepreneurship education that are vital in preparing them to succeed in their own business are basic business skills; leadership and management skills; and entrepreneurship-in-practice skills.

Nirmala Reddy, senior manager of Nedbank business enterprise development

While funding is a significant challenge for starting a business, according to Reddy, SMEs cite the key challenges to be barriers to entry in the form of regulatory requirements; industry knowledge and expertise; and access to markets. Nedbank believes that entrepreneurship is a journey – one that the bank wants to support its clients on.

Nedbank launched its in-house enterprise and supplier development (ESD) programme in September 2015. Suppliers receive a combination of business mentorship, business acumen and specialist training, masterclasses and personal coaching. The programme provides customised solutions to address specific needs, extending to mentorship, systems intervention, growth and expansion strategies and diversification.

Nedbank has uplifted and empowered thousands of businesses through its ESD programmes. The programmes have taken women business owners on a path that has revealed resilience and tenacity, where failure is not an option. The programmes offer access to a sounding board (mentorship and coaching); a safe platform from which they can test growth strategies; networking; collaboration opportunities; and access to markets augmented with specialists and industry experts. Nedbank further underpins all of this with a banking offering of products and services that are the best for the business.

Nedbank’s philosophy of seeing money differently has set it on journey with phenomenal women that have evolved from being business owners to business leaders and change agents for their families, employees, communities, the economy, the country and the continent. The dialogue has changed. It is no longer the aspiration to become the next Richard Branson (with respect to Sir Branson). Now the aspiration is to become the next Bongiwe Monakedi (Monabo Hygiene Services); Charlotte Khoza and Annemarie Mostert (Mila Cleaning Services); Puleng Tubane (NRP Properties); Zaytoon Benefeldt (Z & M Interiors); Zolelwa Molapisi (By Design Africa); Sandra Moodley (Uphawu Brand Builders); Zaheeda Essa (Pospack); and Benzi Shabalala (Benzi for Flowers).

Nedbank is celebrating 10 years of supporting this incubator. It started this in conjunction with the Knysna municipality in 2009. The incubation period extends for three years, and entrepreneurs receive training, mentoring and one-on-one coaching. Nedbank funding is used to purchase equipment and stock for the participating businesses.

Nedbank is driving transformation in the fuel industry through supporting the PetroCONNECT readiness programme. New entrants to the fuel industry receive hands-on training, expertise and access to business opportunities with oil companies and existing dealers. Those that are successful in the programme will go on to benefit from PetroCONNECT’s networks, opportunities and mentorship as part of a long-term approach for business sustainability. PetroCONNECT is a solutions-driven company formed by two experienced fuel retailers, Sbonelo Mbatha and Mark Harper, with the goal of providing end-to-end solutions in the SA fuel retail industry. It was founded on the vision of playing a proactive role in helping all players in the fuel sector to further transformation objectives in a sustainable manner.

In 2017, Nedbank provided R3.4 million for 100 artisans in the Western Cape and Gauteng to receive training, development and capacity building, and for them to be set up as formal businesses. The programme has been tremendously successful, with more than 60 contractors receiving support in Western Cape. The Gauteng leg of the initiative began in June 2018.

There are a few essentials that SMEs should take note of when looking for finance. If an external party is putting together the business plan, the business owner must ensure that he/she has a solid understanding of the business plan and the supporting financials.

It is good practice to maintain a relationship with the bank in good and bad times. When an application is being assessed some of the elements that are scrutinised are the business track record; the business owners and the management team (expertise and industry knowledge); the business’ viability; the propensity for long-term growth; and job creation. Ultimately the bank is looking to assist businesses that can grow to become significant contributors to the economy while creating sustainable jobs.
As a bank committed to growing SA small businesses, it echoes the words of Joyce Banda, former President of Malawi, who said: ‘The seeds of success in every nation on Earth are best planted in women and children’. Let’s build SA collectively.

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