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During the last financial year, risk financier Business Partners Limited approved R1.049bn in funding through 295 investments for small and medium enterprises (SMEs).
“Of these new investments, we are pleased to report that financial assistance to black entrepreneurs increased to 40.5% compared with 27.4% in the previous financial year. Finance assistance to female entrepreneurs improved to 37% from 34% in the 2016/2017 financial year,” says Ben Bierman, managing director of Business Partners.
“Placing over R1bn into the hands of business owners has helped to save and facilitate much needed job opportunities in the South African environment, assisting in driving the economy forward. During a year when low economic growth impacted all businesses, especially SMEs, this outcome is encouraging.”
Business Partners was also able to achieve growth in profit for the year.
“Net profit attributable to equity holders increased by 5.4%, amounting to R218.4m. The investment portfolio grew by 7.5% to R2 956m. Interest income grew by 5.8% to R405.1m,” says Bierman.
He adds that there has been a consistent improvement in cost-effectiveness.
“We were able to improve the organisation’s cost effectiveness and attained a cost-to-income ratio of below 50% for the second consecutive year. Another positive was the reduction in net credit losses by 5.7% to R76.3m, in spite of the year’s tough economic environment and increased levels of credit risk,” says Bierman.
The latest Business Partners Limited SME Confidence Index indicates that business confidence levels have steadily been on the rise since the start of 2018.
“This is certainly a good trend, since increased business confidence bolsters SME owners’ willingness to grow, employ more people and better manage their cash flow," says Bierman.
"However, these confidence levels may decrease again if government does not continue to ensure that they are backed up by stability and certainty in the economy and regulatory environment.”
Bierman says the latest results show there is a significant need for more innovative funding solutions and well-planned, well-executed and accurate technical assistance support for SMEs.
“Last October, we introduced an interest-free technical assistance facility for SME clients, which catalyses skills transfer for SMEs in fields that range from sector specific specialist services to legal and accounting offerings. We believe the facility will meaningfully support business owners to better manage their businesses and improve profitability and competitiveness," says Bierman.
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