JPMorgan applauds success of SME pilot programme in SAComment on this story
JPMorgan announced this week that its two-year pilot programme for South African small and medium enterprises (SMEs) had achieved its objectives.
The programme, which asserts that SMEs are the key drivers of growth for South Africa’s economy, found that greater emphasis and investment was needed to develop entrepreneurs by providing training and other business development services (BDS).
Rafia Qureshi, the manager of JP Morgan’s philanthropy programme for sub-Saharan Africa and the Middle East, said all companies in the SME Catalyst for Growth Programme (C4G Programme) were still successfully operating.
They had achieved an overall median annual revenue increase of 27 percent growth in employment and an increase in successful applications for finance by 14 percent.
“Furthermore, as planned, a business development services analytics platform is being established and the C4G Programme is transforming into an independent not-for-profit organisation where the platform will be housed,” she said.
She said the challenge faced by many SMEs was that businesses often did not know when it was the right time to take out large amounts of funding, often without a solid foundation, which led to many businesses failing in their first year of operations.
However, businesses that went through the ranks in terms of business development lasted longer in the game.
Of the businesses that underwent business development, 50 percent had seen an increase in staff, with an average addition of one employee per SME.
Also, successful applications for finance had risen by 14 percent, said Qureshi.
Qureshi said the C4G Programme had also added its first corporate partner, Anglo American, through its Zimele enterprise development initiative. As a corporate partner, Anglo American would commit to using the C4G analytics platform when procuring BDS.
As buyers of these services, corporate partners had an opportunity to drive quality in the market by intentionally moving their enterprise development investments towards BDS providers that created value for their SME clients and away from those that were unable to assist them.
Brian Smith, the head of Investment Banking for JPMorgan in sub-Saharan Africa, said the group was extremely pleased with the C4G Programme participants.
“The programme led the SMEs to tangible growth in revenue, employment, customer reach and enhanced access to capital. In two short years, the pilot has proven that BDS has strengthened key business systems and instigated greater focus, prioritisation and strategic thinking amongst SMEs,” he said.
Also, at the close of the programme, all 20 SMEs were still in business, which was impressive given that about 18 percent of their peer firms failed each year. “We are excited that the first corporate partner Anglo American will join the growing list of partners of the C4G Programme, a strong endorsement of this successful initiative,” said Smith.