#SONA2019: What should small business look out for?
DURBAN - The SME sector - the lifeblood of our economy - has been taking significant strain in the last couple of years according to Karl Westvig the Chief Executive of Retail Capital.
"SME’s have been squeezed by rising costs and lower sales because of over-indebted consumers and a sluggish economy. We would welcome added investment in the SME Sector and lower utility costs," said Westvig.
Government needs to support SME’s through access to finance, a lower regulatory burden and lower electricity and fuel costs.”
The SME sector contributes 36 percent to the national GDP, but with continually rising costs of running a business in South Africa, it’s understandable that many startups and entrepreneurs might need a little help.
There are 2.4 million small and medium-sized enterprises (SMEs) in South Africa that employ around 60 percent to 70 percent of the working population. But this market experiences a dearth of funding, leading to a R86-billion credit gap for small businesses.
Each year, the number of SMEs in the country decreases due to their inability to access finance.
Retail Capital provides funding for SMEs to help them build and grow their businesses. The company was born of a necessity to significantly boost the industry and Westvig’s core focus is helping small businesses across South Africa to achieve their own significant success.
Westvig noted how underserved SMEs are, and that so many close within three years due to lack of funding.
He said, "In last year’s state of the nation address, President Ramaphosa announced an investment in the Chief Executive Initiative of launching a R1,5 billion Small Business Fund. We would like to see a significant increase to that value, and also for government to demonstrate how it's been applied to date".
Westvig added, "Last year the President also made a commitment that 30% of procurement will go to the SME sector and township operators. We would appreciate an update on how this is proceeding and is being applied".
With a slow-growing economy there needs to be a significant investment in the SME sector and this can be done through an increase in access to funding which government can support.
Retail Capital has helped over 15 000 SME businesses with funding for expansion and investing in stock and has advanced over R2 billion since its inception in 2011.
This leads to business growth and more employment - we estimate over 12 500 jobs have been created over 8 years through additional funding provided to SME’s by Retail Capital.
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