It was East London's turn last week as the Johannesburg Stock Exchange revelled in its new role of matchmaker, staging speed-dating/Dragon's Den events around the country between small enterprises and potential funders.
The fun evening event, held at a jam-packed ICC on the beachfront, aims in all seriousness to connect small and medium-sized enterprises (SMEs) that have big ideas with cash-flush investors prowling for great deals.
Otherwise known as capital matching, the roadshow is hell-bent on building a thriving win-win entrepreneurial ecosystem.
The JSE — working in collaboration with the Eastern Cape Development Corporation (ECDC), African Bank and Small Enterprise Development Finance Agency (SEDFA) on this leg of the project — will assist SMEs in the city and wider BCM overcome the sector’s common problem, which is access to development funding through investors.
Cleola Kunene, who heads the JSE’s SME development programme, said their vision was to take the expansion drive country-wide, meaning no province would be left behind.
Capital matching is just one aspect of the JSE’s efforts to support entrepreneurs, which will eventually be a suite of financial programmes.
Another is the JSE's Accelerator programme, which is aimed at mid-sized businesses that need mentoring as well as funding.
“African Bank is one of our headline sponsors. When you consider that 70% of SMEs are struggling, despite many of them having access to skills and tools, it is the lack of funding that sinks them.”
Understanding the importance of SMEs in SA’s economic advancement, the JSE is determined to identify major obstacles impeding their growth.
Noting access to funding as a significant barrier, the JSE has initiated efforts to address this issue.
The SME development programme works with the economic development department, SME development ecosystem players, capital providers, associations, and business chambers.
“Together, we are driving this key initiative to bridge funding gaps in the SME sector, ensuring these vital businesses have the support they need to thrive,” Kunene enthused.
African Bank’s Gary Markson, who handles business and commercial coverage, said while AB has mainly been known as a microlender, it has evolved and now offers home and vehicle loans too. Asset finance is the next big step.
“The group is targeting a listing in the next two to three years. We bought Grindrod Bank two years ago, which spring-boarded us into the commerce space.
"UBank was the next acquisition, and with it came several new divisions: business banking, overdrafts, working capital, asset funding, property loans, an investment banking arm, acquisitions, financing and management buy-ins.
"Also, deposits from customers. We look after their cash and they get interest on it.”
The matching capital product got off to a robust start last year with a roadshow that started in Cape Town, where it gathered a large group of startups and potential investors for the "Dragon's Den/speed-dating" event.
“We did exactly what we are doing here today,” said Kunene.
“We gave a presentation, explained the process and then paired off investors with SMEs.
"The pairs met in rooms adjacent to the presentation room, introduced themselves and then the SME representatives got the chance to pitch funding proposals.
"They had to complete the presentation within a limited time, because the next applicant was already at the door.
“I am anticipating the same result in East London that was achieved in Cape Town, which to call it a success would be an understatement.
"There were 64 successful presentations.
"In total they received a combined R200m in funding. It will be very interesting to see what the East London effort realises.
"Now we have the rest of the country to look forward to — and we are eager to get going.”
DispatchLIVE
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.