Johannesburg - Johannesburg hipster Sifiso Dlamini turned
his passion for sneakers into a small business, but like many South African
entrepreneurs, he's battling to find financing to expand.
For six years, he's followed his heart's passion in making
trendy sneakers that are a hip-hop staple.
"We take our time and make sure that everything is put
together," he said in his workshop filled with spools of thread, pots of
glue and scraps of leather, the 24-year-old said.
"It's more resistant, lasts longer," he said of
his shoes. "I would say its magic."
His clients are largely fashionistas from Soweto, the
Johannesburg township that styles itself as the epicentre of South African pop
culture.
The shoes from his label Eish Hade - a slang for "Oops,
sorry" - cost up to R600, a price that lets a man "feel yourself like
a king" and gives women a way to walk "sexy, not in a hurry, but just
relaxed", he said.
Orders are coming in, but Dlamini can't keep up. He works
hard, but he only has two sewing machines and two assistants who earn R2 000 a
month.
He certainly can't afford to open even a small shop in
downtown Johannesburg, the stomping ground for the city's creative types.
Last year he tried and failed to get a bank loan for R100
000.
"Obviously I need capital to buy machines. I think
people don't want to believe in this business because it is too small. They
just want to see if we are making a profit," he said.
"People like Sifiso, there are hundreds of thousands
(of them) in South Africa," said Lumkile Mondi, chief economist at the
Industrial Development Corporation, which helps businesses with loans of the
million-rand scale.
"They don't have capital and it's a problem. So you
finance yourself by your family until you make money. So, except if you have an
affluent family, it's difficult," he said.
The irony is that South African corporations are sitting on
cash reserves of more than R500m, even though interest rates are at 30-year
lows, rather than invest in new businesses.
Business leaders blame the uncertain global outlook, and
Mondi said South African companies are only willing to take a chance on new
ventures in technology or financial services.
Government has tried to step in, creating the new Small
Enterprise Finance Agency in April, with R1.4bn in funding to loan to small
businesses over the next three years.
"Government has done its part, but people don't know
about the institutions" created to help them start up businesses, Mondi
said.
And when entrepreneurs approach banks for loans, they often
don't know how to speak in the terms that the bankers want to hear - explaining
things like market size or commercial plans, Mondi added.
Small businesses employ an estimated 65% of the 13.8 million
South Africans who have jobs, and growing small businesses is seen as one way
of beating down an unemployment rate mired at around 25%.
South Africa has set out a goal to create five million new
jobs by 2020, a goal that neither government nor big business could possibly
meet, said Clem Sunter, head of the AngloAmerican Chairman's Fund, the mining
giant's charitable arm.
"Our goal for 2020 should be to create one million new
businesses rather than five million jobs," he said, warning that South
Africa needs to stop sitting on the success of its mining past and start
embracing new businesses.
"It is the only way to create that number of
jobs," he added.
For now, Dlamini is keeping all his receipts to start formally keeping his books. But he's still selling his shoes by word of mouth or on Facebook. He hasn't hired an accountant or started paying taxes.