Johannesburg - Big banks have come under criticism for failing small businesses, but the CEO of First National Bank's commercial banking division has defended the big four's approach to entrepreneurs looking for funding.
According to Iris Dempsey, banks are doing as much as they can, considering the risk involved in approving a loan to a small business owner.
"Banks will always look for certain security or structural profiles," said Dempsey.
"We don't just give money out - there has to be evidence of some thinking behind it [a business plan]."
In recent months, banks have come under fire from Fin24.com users for not doing enough to support small- and medium-sized enterprises (SMEs). But according to Dempsey, banks are successfully providing finance for SMEs to take off, and helping them manage their business.
Banks look at a company's potential, rather than the entrepreneur's previous experience, she said.
"We're forward looking - we look at future cash flow."
"Commercial banks are also extending into the mentoring of small business owners to bring productive entrepreneurs into play," she said.
Dempsey said entrepreneurs can expect two questions from a bank: what does your business plan look like, and what are you putting into the game?
"We look at the input stake from the entrepreneur," she said.
Helping hand to fledgling sector
According to Dempsey, the entrepreneurial revolution in South Africa is still in its infancy.
"One problem in SA is that there are a number of government structures and NGOs [non-government organisations] all professing to be custodians for entrepreneurs - we need to consolidate the programmes and form a common strategy."
FNB is running a township programme to help emerging entrepreneurs draft a business plan and source financing.
Nedbank, Absa and Standard Bank all offer mentorship programmes that include financial planning, advisory services and even a list of ideas to expand a business.
"We have strong experience in what makes a successful business; entrepreneurs need to understand that the bank isn't just a moneylender, but also a business partner," said Dempsey.