As an organisation, we have committed to a significant mindset change to meet the needs of SMEs. We want to nourish entrepreneurship and understand the plight of our customers, not only with regard to access to funding and markets, but also with respect to the business development support required to nurture these businesses from today’s SMEs to tomorrow’s corporates.
This is evidenced in our mantra – Africanacity – which is in line with our new purpose: the distinctly African ability to always find ways to get things done. It is the driving force behind everything we do.
Bringing it back home, we have come to accept that SMEs are major contributors to the economic growth of our country and of the African continent. SMEs are engines of job creation and growth in emerging markets that are central to wider development efforts. We have refreshed our Enterprise Development strategy to be progressive and lead the change from within, focusing on key sectors and their value chains, namely Agriculture, Franchise, Public Sector, Manufacturing, Renewable Energy, Retail Wholesale and emerging industries that would grow South Africa into the future. Our teams across the country will engage SMEs to develop them to become eligible to participate in the supply value chains of corporate and public sector entities. Growth strategies and funding solutions are aligned to these value chain opportunities to ensure sustainable growth of these SMEs.
Our approach to value-chain lending blends our commercial funds and/or guarantees with more affordable options from third parties to improve the probability of success. We have signed over R2 billion in financing mandates with our corporate clients and third-party financiers to support SMEs and to optimise and transform our corporate clients and their supply chains.
Similarly, we have also learnt that partnerships are essential in any business and have collaborated with various institutions including the Department of Trade and Industry to help grow SMEs.
Enterprise Development:
Absa has a history of equipping SMEs with business knowledge and leading in improving access to finance to enable growth and development. These offerings have been, and will continue to be open to the public as part of our commitment to entrepreneurship development in the communities in which we operate.
The Absa Enterprise and Supply Chain Development solution focuses on three crucial pillars: access to markets, access to finance and access to business development services.
Access to finance
More than R1 billion has been raised in black SME financing of which more than R350 million has been extended as loans to SMEs in corporate value chains. Corporates face challenges in transforming their supply chains. Therefore, Absa works with both corporates and SMEs to build a bespoke funding model to ensure sustainable value chain transformation that delivers quality products, remains efficient and competitive.
As a financial partner that has the necessary skills and infrastructure, we deliver innovative solutions based on our ways of assessing the business and understanding the cashflow of SMEs. Our solutions are customised to the needs of the SME.
Ultimately, SMEs who demonstrate affordability and potential future growth through off-take agreements and the ability to deliver are eligible for this type of financing. Performance and payment risk are addressed by the corporate, financier and SMEs, which greatly improves the probability of success for all players on this solution.
This kind of non-traditional funding is a departure from the normal balance sheetbased type of funding in the financial services sector as it not only relies on the type of security provided but also on future cash flows between corporates and their SMEs – a solution where there is more than one winner.
Access to markets
Absa in partnership with the Supply Chain Network Portal, has over 80 000 SMEs on their portal, as well as more than 4 500 corporate buyers and over R2.5 billion of corporate procurement opportunities made available per month.
This online eMarketplace enables corporate and government buyers to easily discover credible local suppliers, and for SMEs to promote their company and connect to potential procurement opportunities. Importantly, Absa partners with major conferences focusing on SME and Supplier Development – in line with our current strategy. These events are a great platform for corporate buyers to network with potential SME suppliers.
Access to Business Development Support
Absa’s Business Development solutions are designed for long-term growth, profitability and general business success. It equips SMEs with the ability to become funding-ready and sustainable. Since 2011, through our Enterprise Development Centers, we have reached more than 110 000 SMEs with training, mentorships, networking, advisory and coaching.
We are expanding our Enterprise Development platform through our Relationship Model. The success of SMEs will be paramount on how we engage and share the knowledge of Enterprise Development through our footprint in the various towns and markets. The intention is to provide solid and objective advice to SMEs and contribute to our national goal of growing the economy. Absa is committed to SME growth through our Enterprise Development programme. Change your business trajectory and visit one of our skilled bankers, to help grow your business.
