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STRATEGIC PARTNERSHIP WITH LOCAL MUNICIPALITIES A BOON FOR SMMES

Published: Tuesday, November 15, 2016

TrainingCommunity AffairsCommunity DevelopmentEconomy

A strategic partnership between Ithala Development Finance Corporation and local municipalities in KwaZulu-Natal will enable business owners to thrive and remain profitable.

    The current economic environment, characterised by low growth and rising interest rates, has placed struggling South African businesses under immense financial strain.

    The results of the latest Global Entrepreneurship Monitor (GEM) report for South Africa revealed that entrepreneurs in the country have declined during 2015 and 2016.

    It was also revealed that there was an 18 percent increase in creating startups out of necessity since 2014 - attributed to SA’s poor economic growth and high unemployment rates.

    Of concern were the lack of profitability or access to finance to sustain businesses, resulting in 62 percent of businesses closing their doors in 2015.

    The majority of entrepreneurs are reported to be aged between 24 and 44, and account for 50 percent to 60 percent of all early-stage activity.

    A decrease in female entrepreneurs has also been reported. During 2014, women were 2.6 times more likely to start-up a business out of opportunity while in 2015, this figure decreased to 1.6 times.

    Early-stage black African entrepreneurs decreased from 85% in 2014 to 68% in 2015.

    Despite this negativity, it is encouraging that a strategic partnership between Ithala Development Finance Corporation and local municipalities in KwaZulu-Natal will enable business owners to thrive and remain profitable.

    Ithala is KwaZulu-Natal’s provincial development agency, a primary driver of economic development and a strategic enabler of support to people in disadvantaged communities.

    In 2015, Ithala reached some 1 581 SMMEs in all 11 districts of KZN through the Siyasebenza business development programme which consisted of three-day information-sharing and interactive business development workshops.

    The purpose is to educate and inspire existing and aspiring entrepreneurs with ways to build and grow sustainable businesses.

    The 2016/17 leg is phase two - building on the success of last year’s campaign to continue the journey of empowering, uplifting and guiding Ithala’s clientele in becoming successful entrepreneurs.

    “Siyasebenza” meaning “We are working” is a series of developmental outreach programmes by Ithala aimed at uplifting youth, women and SMMEs in townships and rural areas.

    The workshops comprise a full-day training with KZN-based SMME’s and co-operatives on key topics of importance:

    • Starting a business;

    • Planning a business;

    • Market research;

    • Funding your business;

    • Financial record keeping.

    “The objectives of the campaign are to uplift communities; empower entrepreneurs; support and guide the youth; promote skills development; stimulate economic development; increase entrepreneurship and contribute towards job creation and nation-building,” said Mano Muthusamy, Acting Business Finance Executive at Ithala Development Finance Corporation.

    “As Ithala, we are committed to accelerating socio-economic development and empowerment and providing the resources necessary for a winning scenario. Failure is therefore, simply not an option for SMMEs.

    “We have a distinct mandate to deliver hope and enable people’s dreams. For 57 years, we have been listening to people in all sectors of the economy to understand their challenges in order to provide them with tangible solutions.”

    He said the workshops were a unique platform for existing and aspiring business owners to interact with Ithala’s business finance experts on the ground and receive valuable mentorship that will elevate their businesses to the next level.