Small businesses tell of hardship
Government and banks come under fire
CLOSE to 100 small medium enterprise (SME) owners and entrepreneurs in the Eastern Cape have expressed frustration at organised business and the government for failing to ensure an enabling environment for them to grow and get funding.
The criticism was voiced at an Eastern Cape small business seminar organised in Port Elizabeth by the SA Chamber of Commerce and Industry.
Godfrey Bakers, 19, who runs a plumbing business, was upset at the government’s inability to help grow entrepreneurs.
He started his business with what was supposed to be money for his university tuition.
He also criticised the National Youth Development Agency (NYDA) for not being able to deal with the red tape that impedes access to funding. “Sometimes I feel like I should just give up . . . the NYDA tends not to be responsive and when it is, you are sent back and forth.”
Bakers said he had received no help and was barley staying afloat.
Nkosana Mapili, 43, who is in the hospitality industry, is frustrated at how he often struggles to get funding, especially from private financial institutions.
“They show no appetite for businesses in the accommodation field as they deem this as a seasonal business and therefore a risk factor, “Mapili said.
But Mapili commended the support which he had received from the Small Enterprise Development Agency (Seda) which helped develop his website, and provided him with coupons as part of the start-up cost.
In response, Nedbank acquisition manager Patrick Gedeze explained that hospitality businesses were not necessarily viewed as high risk, but rather that people needed to evaluate their com- panies and find the main attraction in surrounding areas.
He said financial institutions needed to tell entrepreneurs when it was believed a business would not be sustainable.
NMB Business Chamber chief executive Kevin Hustler said small businesses and entrepreneurs needed to have solid plans with off-take agreements with clients and collateral to get access to finance from commercial institutions.
“For government-lending organisations similarly at least half of the grants should be matched by entrepreneurs’ collateral,” Hustler said.
“This is a tremendous challenge for entrepreneurs starting out to deal with massive amounts of red tape, securing collateral and ensuring compliance.”
Hustler called for the Department of Small Business Development to try hard to reduce red tape, but said there were “encouraging” projects under way to help SMMEs.