It is well recognised that women are powerful drivers of economic growth in South Africa, and are vital to the country reaching its full economic potential. Yet women account for only 18% percent of business owners in South Africa, according to the second Mastercard Index of Women Entrepreneurs (MIWE), released earlier this year.
The reasons are many, including lack of financial literacy, but one of the biggest constraints facing women entrepreneurs is access to finance. As most women entrepreneurs are concentrated in the informal sector, the majority of them access financing through micro-lending institutions, which offer only limited support. When they are ready to grow into SMMEs, they again face difficulties in obtaining loans from commercial banks.
According to the ‘Inaugural South African SMME Access to Finance Report’, published last year by the online access to finance portal Finfind, the SMME sector provides a “compelling, largely untapped market opportunity for innovative funders”, estimating the SMME credit gap at between R86bn and R346bn.
Finfind’s research showed that many SMMEs that are eligible for funding are still unable to secure it due to their lack of finance readiness, i.e., they are unable to produce the financial documentation required by funders to assess bankability and affordability, in order to approve their funding applications. These documents include up-to-date management accounts, latest financial statements, budgets, forecasts and tax clearance certificates, among others.
This was reiterated at the recent African Youth Networks Summit in Tswhane, where the head of Old Mutual Foundation Millicent Maroga stressed, “the key issue is a distinct lack of support in getting the business ready for funding”.
Enter initiatives like the Riversands Incubation Hub, a campus north of Sandton that houses over 150 established and start-up small businesses in subsidised premises, with access to business support services. One of its key values to its SMMEs is bridging the gap between them and the many players in the funding space, in particular through its annual FundEX event, a platform giving guidance and helping to match entrepreneurs with funders.
“Contrary to popular belief, there is funding available. FundEX provides practical guidance on what funding is available and what it takes to access this capital. It also gives entrepreneurs the opportunity to interact with a variety of funders, including banks, government funders and alternative funding platforms,” says Jenny Retief, CEO of Riversands Incubation Hub.
The theme this year is ‘Secrets of Scale’, unpacking what it takes to build a ‘fundable’ business. This is highly pertinent, as much of the complexity in the SMME funding environment is seated in the size of the business, and what stage of growth it is at.
Finfind’s research found that although SMMEs and start-ups may qualify for venture capital funding, funding opportunities for less scalable SMMEs are less promising. “This opens the door for new, innovative funding models to serve this section of the SMME market. Start-ups and micro-businesses represent a significant potential market for innovative funders who are able to develop new lending models tailored to address this growing market,” said the report.
As women proliferate in this space, they need to equip themselves with as much as information as possible about the funding opportunities out there, says Retief.
“The DTI, for example, offers funding programmes, and aggregators such as FinFind and others can help entrepreneurs navigate the more than 400 different funding solutions available in SA. Entrepreneurs can also boost their business by regular engagement with a mentor. Many incubation programmes offer this type of support,” she says.
There are also many initiatives to bring resources closer to entrepreneurs. For example, the Technology Innovation Agency (TIA) offers Technology Stations in diversified sectors, ranging from agro-processing, chemicals, clothing and textiles to tooling. These provide entrepreneurs access to university-level technical levels and specialised equipment at affordable pricing levels.
This speaks to upskilling, a key offering of incubation hubs and critical for women entrepreneurs needing to become finance literate. “At Riversands, we have a team of coaches and mentors who guide entrepreneurs in specific areas such as finance or strategy. Relevant educational material is regularly presented in formal as well as informal ways and reinforced with practical coaching to help entrepreneurs put theory into practice in their own businesses. This is flanked with professional bookkeeping services provided on a subsidised basis. This allows business owners to build the financial records and systems their businesses need to qualify for understanding,” says Retief.
The bottom line is that while funders need to stretch further to reach female entrepreneurs, these entrepreneurs need to make their own efforts to connect and ready themselves to tap these resources. Only then will the latent economic value of women in our economy reach its full potential.
Riversands FundEX takes place on August 16. For more information visit: http://www.fundex.co.za
13 Female Entrepreneurs Rising To The Top In SA
These 13 black businesswomen are rapidly rising stars. You can learn from their journey and their entrepreneurial advice.
Women all over the world are the powerhouses behind some of the newest, innovative start-ups and concept businesses. South African businesswomen are gaining momentum in this global arena too, with success stories like the 13 ladies below.
Female-led business growth is happening in South Africa, despite the latest Global Entrepreneurship Monitor (GEM) statistics showing that only 6.2% of South African females take the leap into entrepreneurship.
These 13 black female businesswomen are going against statistical trends and represent some of the rising stars in South Africa’s entrepreneurial landscape.
[Infographic] The World’s Most Influential Female Entrepreneurs
Numerous women have enjoyed massive success with the businesses that they started. Some of these are profiled in the infographic below from All Finance Tax.
Managing your own business is not easy. Unless you’re willing to stop at nothing to make the business succeed and unless you can balance supreme self-confidence with the cool, analytical head to know the risk that’s a risk too far, your entrepreneurial sojourn will almost certainly be brief and disastrous.
If you can set up your own company and keep it operational for at least several years, you will have proven that you have what it takes to be an entrepreneur. Even if you don’t turn over a massive profit from the company, being able to stand on your own two feet with self-made earnings is an achievement.
Then there are those whose businesses more than just survive. They grow into multimillion-dollar international enterprises which could make the owners world famous. One such example is JK Rowling. Granted, she might not fit the stereotype of a business owner, but she turned her passion into her life’s work and earned a fortune because of it. Like many entrepreneurs, she had an idea which took her from being in financial distress to owning a globally-recognised brand, namely the Harry Potter series.
Her story is an inspiration to female entrepreneurs everywhere, as the corporate world is still thought of as a male-dominated environment. That perception is rather misleading, though, as numerous women have enjoyed massive success with the businesses that they started. Some of these are profiled in the infographic below from All Finance Tax.
“See The Gap, Be Decisive And Love What You Do” – Advice From A Fempreneur
Women are making headway in the entrepreneurial landscape, but we still have a long way to go to eliminate the gender gap in terms of entrepreneurial involvement.
Women face many barriers in business, including a lack of support structures, limited access to funding and the challenge of juggling personal and work responsibilities. Even though there is a growing community of women entrepreneurs globally, if we want equality in business and inclusive growth in our country, women entrepreneurs need to be developed and supported.
Having worked in the marketing and PR industry for many years, I came to recognise the frustration that clients felt at having to brief multiple agencies and it sparked an idea. I realised there was a gap in the market for an integrated agency that could develop a communications strategy for a client, and then offer all the marketing services in-house, from digital and direct marketing, to PR and social media.
Without a mentor or role model to learn from, I went in head first and handled everything on my own – new business, key client relationships, overseeing creative and even conducting quality control. With some guidance in the early years, I probably would have focused more on the bigger business strategy, rather than being stuck in the trenches. What I have learned over the years, is that running a business can be lonely, so I network with other business owners often to share ideas and concerns, and to see how I can do things in a more decisive and efficient way.
On the financial side, I was very fortunate to have business partners who invested in me and Stratitude. With this financial backing I could concentrate my efforts on building my business and delivering the best possible results, rather than worrying about money.
When it comes to work-life integration, I know that these two areas overlap, so I take a very pragmatic approach; in the same way that I don’t think twice about working from home when necessary, I’ll also take time out during the day to watch my children play sport or take them to the doctor. While I keep office hours and schedule meetings during the day, when I’m on a deadline I can be behind my laptop at 5am or 11pm.
I truly love what I do but, just like any business owner, you inevitably deal with moments of pressure and stress. To relieve this tension I run and swim. Swimming is my meditation and thinking time, and a good run in the morning helps me see the world more clearly. When it comes to relaxation, I make time to go to the beach or berg – I love the mountains and get recharged at the sea. As a family we also ensure that we take mini-breaks over weekends and commit to spending time with friends and family.
Women entrepreneurs are increasing in South Africa and they offer a unique optimism and focus in the business environment. While women look at the big picture and plan ahead, they also place emphasis on staff members and growing each individual. At Stratitude we have internal mentorship, training and coaching programmes to ensure that our skills are always up to date and to nurture our passions. I believe this is why we produce the award-winning work that we do.
To help solve South Africa’s unemployment crisis, we need more women-owned and led businesses. With more women creating jobs, rather than looking for jobs, we will start to impact the country’s business landscape and economy for the better.
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