Clus­ters cre­ate jobs and wealth

Finweek English Edition - - LETTERS -

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!

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