Showing posts with label finance. Show all posts
Showing posts with label finance. Show all posts
Tuesday, May 8, 2012
SMEs - a new funding website for South African SMEs
There is an interesting new website for businesses seeking funding in South Africa and it can be found at this website
Saturday, June 28, 2008
SMEs - SMEs and South African banks
South African banks are permanenetly between a rock and a hard place in the context of SMEs.
On the one hand government expects them, as public companies to provide development capital, which is not their role, and on the othre hand, the government has created the expectation that banks will / should finance all SMEs.
Government on the other hand manages all it's development finance as though they were running a bank, using duplicate systems to the banks in deciding who to give loans to. To government does not do development capital properly, and banks do not do it but are expected to.
However, while South African banks are undoubtedly innovative in many ways, and world leaders in certain respects, they are decidedly lacking in innovation when assessing SME loan applications.
However, I do not believe they are any worse than other banks elsewhere in the world. However, they could possibly all learn a thing or two from banks like Grameen and ICICI perhaps.
On the one hand government expects them, as public companies to provide development capital, which is not their role, and on the othre hand, the government has created the expectation that banks will / should finance all SMEs.
Government on the other hand manages all it's development finance as though they were running a bank, using duplicate systems to the banks in deciding who to give loans to. To government does not do development capital properly, and banks do not do it but are expected to.
However, while South African banks are undoubtedly innovative in many ways, and world leaders in certain respects, they are decidedly lacking in innovation when assessing SME loan applications.
However, I do not believe they are any worse than other banks elsewhere in the world. However, they could possibly all learn a thing or two from banks like Grameen and ICICI perhaps.
SMEs - is finance hard to find
One must question whether there availability of finance to SMEs is any different today, compared to say 30 or 40 years ago.
This follows the assumption that because many governments in the world are attempting to reduce poverty and unemployment through the creation of SMEs, the number of SMEs requiring funding has obviously grown.
The second question that begs, is whether or not the reason that many of the SMEs who today are seeking finance and being refused, is that these government efforts are bringing people into the sphere of entrepreneurship, when in fact they are best suited to at best small business managers, and at worst survivalist entrepreneurial activities.
The final question, is whether or not the banks by now should have created a new methodology for assessing SME loan applications. The worldwide number of SMEs has grown immensely, and their contribution to the world economy is between 30% and 40%. Can banks continue to ignore this pot of gold?
This follows the assumption that because many governments in the world are attempting to reduce poverty and unemployment through the creation of SMEs, the number of SMEs requiring funding has obviously grown.
The second question that begs, is whether or not the reason that many of the SMEs who today are seeking finance and being refused, is that these government efforts are bringing people into the sphere of entrepreneurship, when in fact they are best suited to at best small business managers, and at worst survivalist entrepreneurial activities.
The final question, is whether or not the banks by now should have created a new methodology for assessing SME loan applications. The worldwide number of SMEs has grown immensely, and their contribution to the world economy is between 30% and 40%. Can banks continue to ignore this pot of gold?
Friday, June 20, 2008
SMEs - venture capital?
Gordon has covered venture capital a few times recently on his blog. His blog is the one entitled The Scottish Entrepreneurial Input lower down on the right hand side of my blog.The question SMEs often have is whether or not they can access venture capital. The answer is yes, but it is not that simple.
The questions you need to think through and have answers to, are as follows.Do I have a good management team in place? Remember that Venture Capitalists (VC's) do not staff your business. Do I have a vision that is very big in scope?
VC's are not looking for deals to invest in much under the US$1million mark if not US$10million in som cases. They are looking to invest big money in return for even bigger returns. They are wanting a product or service with mass appeal and the ability to have a long product lifecycle, or a product or service which is essentially unique and which will command a premium.Am I prepared to sell it all in the next five years? VC's do not hold businesses for long periods. They want to get in and out, either through the sale of the business or a public offering/listing.These three questions are all that often keep the entrepreneur out of the VC funding race. Most entrepreneurs cannot answer these questions the way a VC wants them answered.These three requirements generally demand a major shift in the thinking of the average entrepeneur. Have you got what it takes?
The questions you need to think through and have answers to, are as follows.Do I have a good management team in place? Remember that Venture Capitalists (VC's) do not staff your business. Do I have a vision that is very big in scope?
VC's are not looking for deals to invest in much under the US$1million mark if not US$10million in som cases. They are looking to invest big money in return for even bigger returns. They are wanting a product or service with mass appeal and the ability to have a long product lifecycle, or a product or service which is essentially unique and which will command a premium.Am I prepared to sell it all in the next five years? VC's do not hold businesses for long periods. They want to get in and out, either through the sale of the business or a public offering/listing.These three questions are all that often keep the entrepreneur out of the VC funding race. Most entrepreneurs cannot answer these questions the way a VC wants them answered.These three requirements generally demand a major shift in the thinking of the average entrepeneur. Have you got what it takes?
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