Big SA banks neglecting small businesses - Mkhize
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Johannesburg - African National Congress treasurer general Zweli Mkhize on Sunday criticised South African big banks for "neglecting" small businesses despite the sector being lucrative and supporting many livelihoods.
"The major issue which relates to the small businesses relates to finance. We have been calling now, increasingly, for the creation of a black bank which must actually cater for the needs of the small businesses which are getting neglected by the big banks," Mkhize told guests at a Progressive Business Forum breakfast at the ANC's 5th national policy conference currently underway in Johannesburg.
"We have had a discussion with the big banks. They don't seem to be convinced on this argument; not that I expect them to be convinced. The point is that we need more avenues, more facilities that will assist the small businesses to be able to have access to finance."
Mkhize said there was a need to discuss the proposal of giving tax incentives to players in the private sector who elected to invest in small business development.
"They [should] know that you can make money when you support small business. That seems to be the one thing that might be able to help guide some of the investors to go into townships and some of the neglected informal economies. But there is a huge amount of money there.
"Sometimes people create an impression that small businesses don't pay. Actually those are the ones who pay because the rules there are a bit rough. With the loan sharks there it is the law of the jungle. You can pay up to 50 percent or above in terms of your repayment cost of that particular loan," said Mkhize.
"Now we need that sector to be protected. Access to markets should not only be about government having to do something. I think big business must do something about it. It must be a new way of doing business in South Africa where big business must look out and say [in] this area we are going to encourage small business to participate."
He said the entrepreneurial skills of South Africans, particularly the poor communities, had to be promoted.
"The point we want to make is that our interaction must lead us to a point where we understand what the ANC is talking about when we talk about radical economic transformation. It's a whole manner of areas where we believe change has to come. Change must come for the purpose of promoting more entrepreneurial activity in the neglected communities in particular, in the small business and small and medium business sector, as well as in the black business area where we are able to get as much of the experience and skills to grow," he said.
"That is what this radical economic transformation is about. We hope that this morning's [Sunday] engagement allows us space to share some of the views you [delegates] and we will continue to have our discussions. At the end of the day, the time to change the base from which our economy is going to grow has come. We need to work together to make sure that there is growth and that the growth is inclusive and it is happening at the level where more and more participants are able to be part of this economy," said Mkhize.
African News Agency