Absa today, 20 November 2013, officially opened an exclusive entrepreneurship centre in Newtown, Johannesburg, South Africa, in collaboration with various private and public partners including the City of Johannesburg.
This initiative is in addition to the ZAR250 million in non-traditional lending that Absa committed to in 2013 aimed entirely at the Small and Medium Enterprise (SME) sector in South Africa.
“The goal we have set ourselves in the SME sector requires us to be more than simply a financier of new start-ups. It requires us to play a meaningful role by supporting entrepreneurs beyond just their financial needs. Funding is of course vitally important, hence our ZAR250 million commitment this year to help SME businesses prosper that typically would not meet normal lending criteria,” Wendy Lucas-Bull, Barclays Africa Group Chairman.
City of Johannesburg’s Executive Mayor, Councillor Parks Tau, said at today’s opening that the private and public sector cooperation with Absa to keep SMEs in business would contribute significantly to growth and development. He highlighted the significance of capitalising on Newtown’s history as the hub of exchange and the original centre of Johannesburg. The private and public partners involved in Absa’s SME initiative include: City of Johannesburg, Telkom, Microsoft, SARS, South African Breweries, GIBS, KPMG, MassCash, SAIPA, South African Bureau of Standards, Sustainable Entrepreneurship Accelerator and Proudly South African.
The overarching objective of the Centres of Entrepreneurship is to increase cooperation in the development of small businesses through the transfer of skills such as financial literacy, knowledge sharing, mentorship, networking opportunities, infrastructure and HR expertise.
Recognising that a lack of business management skills is a huge reason why there is high failure rate among SMEs, Absa says its entrepreneurship centres will also provide infrastructure such as computers with internet access to process business requirements with speed and ease.
“Unique to these centres is that SMEs are offered Absa’s Procurement Portal, which is a virtual market place that links SME suppliers with Blue Chip companies and government bodies to encourage corporates to buy more services and products from SMEs. To date there are over 19 000 SMEs and 3 000 Corporate buyers registered and actively using the portal,” says Lucas-Bull.
Absa now operates eight Centres of Entrepreneurship across South Africa. The Newtown centre is the flagship and sets a new standard that will inform the way in which the other Entrepreneurship centres will be remodelled.
“SMEs are the lifeblood of a thriving economy and given the right levels of support, it can make a significant contribution to the Government’s ambition of creating 5 million more jobs by 2020. In our quest to help people achieve their ambitions in the right way, we are fully committed to pursuing similar joint projects and partnerships in the interests of ensuring we can generate sustainable and more equitable economic growth,” added Lucas-Bull.
Absa believes the largest obstacle facing SMEs is not financial, but rather, access to markets. The ability to penetrate existing markets or create new markets is not easy when there are established businesses with which to compete.
Speaking at a recent gathering of SMEs from Kenya, a platform made possible by the Barclays Africa Group, Happy Ralinala, Head of Business Banking South Africa, reiterated Absa’s commitment to facilitating market access among SMEs across the continent.
“Our intention is to connect the African continent and promote intra-Africa trade among SMEs. While funding and skills development are key to helping SMEs succeed in running their small enterprises, creating connections and giving them access to markets, information and non-financial support is crucial to the success of these businesses,” concluded Ralinala.