Cape Town - Small and medium businesses (SMEs) must organise themselves better to attract more investment, says Daniel Matjila, hief investment officer of the Public Investment Corporation (PIC).
“There are opportunities galore and the amount of money available is significant,” he told business leaders at the Business Place eKapa breakfast yesterday.
He said it was important that SMEs remove the risk associated with them and work to adopt a code of conduct they would adhere to.
“One of the most important things for you to help us (as investors) is to organise SMEs better.”
Structures like the Black Business Chamber could create a constitution that bound business owners to a code of conduct. “If you can get this together – a much more co-ordinated business development support – it will be easier for us to lower the threshold (to invest) and increase our allocation to SMEs.”
Seventy percent of the PIC’s investments were in large companies listed on the Johannesburg Stock Exchange and 20 percent in unlisted companies in the country.
“If you ask me, we should invest more in the unlisted companies because that is where the jobs are created.”
The PIC wanted to invest more in sectors and businesses that were job-creators.
“We want to influence the economy and we have the muscle for that.”
The PIC’s assets grew by 15 percent a year and the economy by 3 percent.
More jobs could be created by investing directly in sectors – such as construction, manufacturing, agriculture and agricultural processing.
“Small and medium businesses will play a key role in this.
“If we increase economic growth to 4 percent, the PIC’s assets will grow by 18 percent.”
Eugene Scheffers, from the Black Business Chamber, said chamber members were excited about opportunities the PIC could provide to SMEs.
“We want the PIC to partner us to help spaza shop owners in townships to organise themselves and buy as a collective from wholesalers. This will give them more power to demand lower prices,” he said.
Matjila said the PIC could agree to such a pilot project.
Mogamat Reza Gallant, from business incubator Shanduka Black Umbrellas, said SMEs’ biggest immediate need was access to funding.
Matjila said the PIC could provide between R500 000 and R100 million for SMEs, but sums up to R10m were handled through intermediaries.
“We can do R5m if the transaction is not complex. The PIC wants to remain lean and mean. We do not want the kind of platform that allows us to do small transactions.” – Staff Writer
Cape Times