DURBAN - The KwaZulu-Natal (KZN) Small Enterprises Finance Agency (Sefa) is targeting the manufacturing and franchise sector this year as it widens its wings within the province and boosts entrepreneurs.
The development finance institution’s regional manager, Thula Mkhwanazi, says they have a focused drive on township-owned businesses as well as investments in productive sectors – provided they are backed by good contracts from reliable off-takers.
“In the current financial year, we would like to grow our portfolio on the manufacturing and franchise sectors. We continue to pursue relations with providers of markets both in the private and public sectors. Businesses owned by women and the youth will also be at the core of what we would want to achieve in the current financial year,” says Mkhwanazi.
The institution said in its previous financial year, which ended on 31March 31, the organisation had exceeded its targets in approval at 133 percent (R38 655 839) and disbursements at 113 percent (R23 200 056). The regional office funded black-owned enterprises to the tune of (R18 221 150), youth-owned enterprises (R6 164 847), and township-based enterprises (R16 448 869) – facilitating 266 jobs in the process.
Entrepreneurs in the productive sectors of the economy received R16 181 775. The above figures were for direct lending only and exclude the wholesale handled by Sefa’s head office.
Sefa KZN says it has also launched a new fund earmarked for military veterans. Mkhwanazi describes it as a brilliant initiative for military veterans who are in business and those thatwho aspire to get into business, provided they have financially viable business cases. He says there have been many enquiries, but the uptake has been low.
“I am anticipating that the uptake will improve as the fund gains momentum and is marketed broader.”
Mkhwanazi is of the view that the best way for Sefa in KZN to respond to the Fourth Industrial Revolution (4IR) is to adopt it within the broader South African environment.
“Through our partnership with Finfind we have created platforms that make Sefa more accessible without necessarily physically visiting the office. Through the FINFINDFinfind platform you can access Sefa from all corners of KZN.”
He says the cost of data and connectivity in the outer lying areas remains a challenge. They continue to try to incorporate technology as much as possible into their operations in order to be more effective and efficient, he says.
But University of KwaZulu-Natal’s graduate school of business and leadership entrepreneurship expert, Dr Macdonald Kanyangale, says that reaching out to small businesses should not just be a matter of geography.
“There are terms and conditions which may inhibit entrepreneurs even while services are right on their doorsteps. It is also about the support they provide to enable these entrepreneurs to repay the loans they received,” says Kanyangale.
He says that traditional banks are closing physical branches as they guide people to operate via digital means, which are cheaper and reduces the overheads of the institutions.
He says development finance institutions can increase their digital presence as many people tend to gravitate to these platforms, thereby, reducing their operating expenses.
Kanyangale says digital platforms would benefit poor people as they require low distribution channels.