Sazini Mojapelo, head of citizenship of the Barclays Africa Group, on the importance of access to finance for enterprises, the need for mentoring of entrepreneurs and providing business development support



Q: Why is it so important to create a culture of entrepreneurship in SA among young people?
A strong SME sector is a key driver of employment and poverty reduction, and has a disproportionally large impact on lower-income communities – providing informal work opportunities to many who do not have the qualifications or experience to secure formal employment in large businesses.

SMEs can be a significant contributor to increased GDP and tax resources, enabling governments to invest in creating a growth environment, namely education/skills and supporting physical and virtual infrastructure. A healthy SME sector can also build economic resilience by broadening and diversifying a domestic economy and often drives productivity gains through increased innovation and competition.

It is projected that by 2045, Africa’s labour force will total 400 million people – surpassing China and India – with youth representing more than 40%. This profile can be favourable when compared with many countries that have ageing labour forces and regressive population growth rates.

However, this youth opportunity implies that we are able to meaningfully engage young people in their respective economies, and this is no more evident than in SA, where youth constitute more than half of the total population.

Given the high levels of unemployment, especially among the youth, entrepreneurship can play an important role in creating job opportunities. But as a country we have relatively low levels of entrepreneurial activity and consequently a relatively poor contribution to the economy by SMEs. Given this context, developing the skills set and culture of entrepreneurship remains a key enabler for young people.

Q: How is Absa/Barclays Africa working towards stimulating enterprise development in SA?
As a large bank with a significant presence on the continent and in this country, we recognise our responsibility to support the development of a healthy SME sector.

In addition to a strong SME proposition across all our markets, we direct a number of strategic initiatives aligned to some of the key drivers of SME success.

These initiatives offer access to appropriate finance as well as skills and business development support, which comprises digital infrastructure such as our free access ReadytoWork curriculum and website, www.readytowork.absa.co.za. It also includes physical infrastructure and resources such as funded entrepreneurial skills and SME incubation programmes, for example, our RISE Fintech incubator, accessed via www.thinkrise.com. Our enterprise development teams and centres provide further support to entrepreneurs, and are available to both Absa and non-Absa clients.

Another key driver of SME success is access to networks and business opportunities. In SA, our SME procurement portal acts as a virtual marketplace connecting large businesses to smaller enterprises. As a significant corporate buyer, we invest substantial resources in supporting SMEs in our own and corporate partners’ value chains. We also look to support SMEs by advocating on their behalf through leveraging our access to local, pan-African and global forums and key stakeholders.

Q: What is the most important attributes a young entrepreneur should have?
Starting a business is not easy – it’s a challenging journey where the success and survival of your business will depend on your skills and abilities.

Some of the traits that elevate successful entrepreneurs above the rest are self-belief – believing in yourself, in the business you want to start, and that you will succeed; self-discipline and commitment, which will help ensure that you stay motivated and keep looking for opportunities, as well as deliver on time even when the going gets tough; and innovation and creativity, which are key to identifying ideas, improvements and changes that create earning opportunities.

It’s important for a young person considering entrepreneurship as a career option to understand what self-employment means. I would encourage young people to look at the entrepreneurial skills modules in our ReadytoWork platform where we address many of these questions.

Q: What are the important skills that people wanting to start their own businesses should be exposed to and learn about?
When considering starting your own business it is important to be able to determine the difference between a good idea and one that can become a business. One must also identify and understand the needs and wants of your target market, what they will pay for and how to price your products or services to create sales revenue that cover your costs and enable you to make profit. Remember without sales you do not have a business. Lastly, plan effectively and have an understanding of basic financials and how to manage your money. A mentor can be an invaluable resource in this regard.

Q: Should entrepreneurship be part of SA’s school curriculum?
Yes, definitely. The sooner young people are exposed to entrepreneurial thinking, the longer they have to develop and test their skills. In the US, the ‘lemonade stand’ culture is a good example of young people learning the key fundamentals of entrepreneurship at a young age.

It’s important to also note that these skills are highly valued in today’s formal sector, so even if your aspiration is to join a large company, these skills will benefit your career.


Q: Financing is a critical component of starting a business. What products does Absa/Barclays Africa provide in this regard?
In addition to our core commercial lending solutions, we also recognise the need to be innovative in our approach to addressing SME challenges.

These specialised non-traditional funding solutions to assist SMEs that typically would not meet the normal lending criteria required by banks, include a number of funds.

The Women Empowerment Fund provides financing to women entrepreneurs who have the skills/expertise and demonstrable potential relevant to the business and/or the industry/sector. The funding is available for all women SMEs who do not have sufficient security to start their businesses or to purchase an existing one under ‘normal’ banking lending criteria.

The Development Credit Fund is offered to SMEs with insufficient security for existing business and start-ups. Applicants need to provide an own contribution, which will be determined by the risk grading pertaining to the industry.

The SME Fund is offered to BEE SMEs that have been awarded contracts or tenders by government/parastatals that require the working capital to deliver the contract/order but lack insufficient collateral for the loan.

The Thembani International Guarantee Fund supports businesses that are at least 51% black owned and are located in South and Southern Africa, or in countries where Absa has operations. The fund offers 50% and 75% guarantees to SME clients.

Q: Why is it critical for young business people to be mentored after they have started an enterprise?
Mentors are able to provide access to networks that most young entrepreneurs would not have yet developed. These networks often provide young entrepreneurs both business and learning opportunities.

In the early years of your business you are almost always resource poor and consequently mistakes, which in later years you may be able to absorb, could lead to your business failing.

Mentors can share their experience and enable you to avoid many mistakes that they have made, or witnessed others make. As you grow your business, they are also able to guide on where to focus your attention and resources.

Q: How is Absa/Barclays Africa working with young business people in other African countries?
We drive a consistent approach towards working with young business people across all our markets. Our enterprise development interventions focus on offering innovative financial solutions and business development support services to small and medium businesses to nurture the entrepreneurs of tomorrow, as well as support and optimise the supply chains of our corporate clients.

Q: Why is it so vital that larger companies help develop SMEs and incorporate them in their supply chains?
Strengthening the SME sector is critical to enabling economic growth, and corporate supply chains are key to creating supportive ecosystems to develop and grow SMEs. One of the ways in which they do this is through providing off-take agreements. The supply chains of large companies represent market access (sales), which lends itself towards enablement and acceleration of SME growth.

In addition, many large corporates will also typically provide the technical skills to ensure order fulfilment within time, quality and consistency, which in turn improves the SME’s long-term sustainability.

Q: What sectors do you think will be the focus points in SA to create opportunities for new SMEs?
Sectors with long-term, strong underlying economic fundamentals such as agriculture and tourism or sectors that could benefit from a growing population, such as manufacturing and retail, may create a favourable foundation for business in SA, including SMEs. Likewise, sectors where SME development is a specific priority for the government and private sector, such opportunities may be ring-fenced with the addition of supporting resources.

SMEs can by nature be disruptive. Fintech, for example, presents opportunities where the barrier to entry and/or investment in existing business infrastructure may be low.

By Patrick Farrell
Illustration: Ricardo Lategan