Clusters create jobs and wealth
I’VE BEEN TALKING lately to numerous small business owners who identified access to finance as the main obstacle to growing and generating jobs in their businesses. Many raised their doubts about the knowledge and lack of authority from bank staff who deal with enquiries/applications for SME finance on a daily basis. Nothing new, as that view could be regularly found in daily newspapers, business magazines and other media.
On the other hand, we have several potential providers of finance to SMEs, ranging from Government agencies, such as Khula and the IDC, plus the Enterprise Development Fund (still in the making) that are pledging billions of rand to that purpose, to SA’s Big Four banks, followed by smaller banks, risk finance providers, venture capitalists and angel investors.
At first look it might appear there’s an abundance of finance in the market and you could be confused with negative feedback from entrepreneurs. However, taking a better look you’ll learn those finance providers have never managed to effectively reach small business owners on a large scale. Nor have they ever figured out how to deal with the specific risk of entrepreneurship!