Black business heavyweights Don Mkhwanazi and Ndaba Nsele have criticised big business for not doing enough to support small and medium enterprises (SME).
“Big corporations are simply not doing enough. It is a big excuse when they say they can’t find the right small businesses to do business with; big business don’t go far enough to support small business in South Africa,” said Mkhwanazi.
He was speaking as part of a panel discussion at the Entrepreneurs Conference hosted by the Durban Chamber of Commerce and Industry and British American Tobacco last week.
The debate was sparked after Sisa Ntshona, the head of enterprise development at Absa, had said earlier that SMEs were simply not visible enough to corporates.
“Corporate South Africa often comes up with the excuse that they can’t find SMEs. Small businesses are simply not visible enough.
“You often also hear SMEs say they don’t have access to corporates. Big business and small business never really find each other,” he said.
“There is something like an 80 percent failure rate amongst start-ups. I don’t believe access to finance is the biggest challenge facing SMEs. Access to markets is your biggest challenge,” he told more than 1 000 aspirant entrepreneurs and small business owners at the conference.
Nsele, the president of the newly formed Black Business Council, disagreed. He maintained that access to finance was the biggest challenge for small businesses.
“Getting finance is still the biggest hassle for SMEs. I also don’t buy the argument that SMEs are not visible enough. Broad-based black economic empowerment (BEE) is flawed and the government needs to make changes in BEE rules for it to work for the small business sector,” he said.
Durban businessman and boss of Sigma International Akash Singh agreed that SMEs needed more support from big business.
“It is a big excuse by big businesses who say they can’t find small businesses to work with and trade. Corporates need to look deeper and find small business partners to work with, because it is in the best interests of South Africa’s future,” he said.
“Besides promoting SMEs, we need to enhance the ‘buy local’ movement… SA needs an increased level of entrepreneurship. In the US about 50 percent of the population have been entrepreneurs at some time in their lives,” said Ntshona.