Province's entrepreneurs get 25% of investment company's R740m loans
KZN gets top Business Partners slice
October 26, 2006
By Samantha Enslin
Durban - Small and medium-sized businesses in KwaZulu-Natal have in the past three years attracted the biggest slice of funding from Business Partners, a small and medium enterprise investment company.
Xolani Meva, Business Partners' chief operating officer, said yesterday: "It indicates how vibrant the KwaZulu-Natal economy is and how entrepreneurial people in the province are."
Of the R740 million lent in the year to March, businesses in KwaZulu-Natal got the most, with 25 percent, followed closely by Gauteng, with 24.7 percent.
The trend of KwaZulu-Natal businesses receiving more funding than other regions had been even more prevalent in previous years, he said.
Business Partners intends to disburse R6.6 billion in the next five years, almost equal to its loans in the past 25 years.
Meva said: "We want to invest R6.6 billion in the next five years in 6 600 small and medium businesses which will facilitate 92 400 work opportunities. Since 1981, when Business Partners was started, the company has invested R6.7 billion in 30 000 businesses."
Speaking at the Durban Chamber of Commerce and Industry's small business conference, Meva said Business Partners' strategy now was to move away from generalised funding to focused investment.
Funding would be accelerated through specialist funds, he said. It has already launched a R200 million tourism fund, the R125 million Umsobomvu Franchise Fund, the R150 million Business Partners-Khula Start-up Fund, a R320 million empowerment fund and a R350 million property fund.
The franchise fund, which is a partnership with the Umsobomvu Youth Fund, initially struggled to take off.
"Franchisors were initially not willing to give young people opportunities," Meva said.
"Franchisors generally require the franchisee to contribute 40 percent of the investment, but following an outcry franchisors are now buying into the idea and do not want to be left behind. So we are seeing more franchisors being flexible on financing." The franchise fund has now lent R71 million.
Business Partners' loans range in size from R250 000 to R15 million. However, Meva said, the government had requested that the bar be lowered so Business Partners would also consider loans of R150 000.
Business Partners' funding is risk finance, while other institutions base lending on security provided by the borrower.
Another opportunity available to small businesses, particularly micro enterprises, is an initiative by the eThekwini municipality, which is investing about R18 million annually in this sector.
This includes R5 million a year on infrastructure and training for informal traders, R1 million to set up the Durban Trade Point office to assist small businesses with imports and exports, and R4.8 million on its business service centre.
The municipality has also launched the Umkhumbane manufacturing hive situated at Cato Manor, which is already assisting 23 small manufacturing companies.
The programme helps start-up companies for three years before taking on a new batch of entrepreneurs.
The hive provides manufacturing space and business training, which includes getting the necessary accreditation for products.
Businesses currently operating from the hive are producing linen, shoes, clothing and leather goods such as belts and handbags.
Philip Sithole, the acting head of business support at the eThekwini municipality, said: "Some businesses already have contracts to supply linen to prisons in the province and hospitals in the province."
|
|
