An Enterprise Development Centre (EDC) in Port Elizabeth has signed Memorandums of Understanding with Nelson Mandela Bay Municipality, Joe Gqabi Municipality, East London Industrial Development Zone and the George and Knysna municipalities to provide funding and business development support to SME suppliers that work with these entities.
Through the initiative, Absa, which has opened seven other EDCs around the country, aims to assist thousands of small and medium enterprises (SMEs) in the Eastern Cape, says KeaObaka Mahuma, Head of Enterprise and Supply Chain Development at Absa.
All SMEs that visit the EDC are offered access to Absa’s Procurement Portal, a virtual platform that links SME suppliers with blue-chip companies and government bodies, to encourage corporates to buy more services and products from SMEs.
To date there are more than 42 000 SMEs and about 6 000 corporate buyers actively using the portal.
“Through our collaboration with corporates in both the private and public sectors, Absa is able to provide SME suppliers in these corporates’ supply chains with access to development finance. These are usually SMEs that would not qualify for lending through traditional channels,” says Mahuma.
By unlocking the potential of SMEs, Absa can play a meaningful role in supporting job creation in the communities of Eastern Cape and help them prosper.
Absa has established eight EDCs in the past few years across the country. EDCs form part of the bank’s enterprise development solution that gives small businesses access to finance, markets and business development support.
Absa’s EDCs provide non-financial support to small business owners. They receive training, can access computers and boardrooms, and benefit from networking opportunities.
“While financial support is an important factor in the successful development of SMEs, business development support, including business assessment, training, mentoring, advisory and information is key to enabling SMEs to become stronger businesses of the future,” says Mahuma.“
Absa understands the importance of SMEs as an engine of economic growth. We are committed to developing sustainable SMEs by linking them into the supply chains of big corporates. We believe that access to markets is an SME’s biggest challenge; after all a business without customers cannot succeed,” adds Mahuma.
“At Absa, we recognise that SMEs need more than just funding to succeed as they also have other challenges. They experience a high failure rate mainly due to a lack of business and financial management skills. As a result, a lot of funding advanced to SMEs under a number of our programmes, such as the Absa Supplier Development Programme, is linked to a nonfinancial support package to improve the owners’ business and financial management skills and to provide them with networking opportunities.”
In addition to the bank’s normal lending criteria, Absa has committed development financing in the form of non-traditional lending aimed at the SME sector in South Africa. This fund is available to SMEs that typically would not meet traditional lending criteria but have ability to generate income in the future.
The Enterprise Development Centre in Port Elizabeth is open Monday to Friday, from 09:00 – 16:00.
1st Floor, Kwantu Towers
Vuyisile Mini Square
Central Business District
Tel: 041 501 9200