R1 billion fund for SMEs

Risk finance company tries to foster the economy

Christo Botes is the executive director at Business Partners, who have earmarked more than R1 billion for the advancement of SMEs within the region for the upcoming 2013/2014 year.
Christo Botes

In an effort to boost the local economy and develop business, Business Partners Limited, a specialist risk finance company for formal small and medium enterprises (SMEs), has earmarked more than R1 billion for the advancement of SMEs within the region for the upcoming 2013/2014 year.

According to Christo Botes, executive director at Business Partners Limited, the company’s  main objective in 2013 is to further develop the SME sector by financing SME undertakings and providing business infrastructure, advice and after-care service.

Botes says that SMEs are key drivers of wealth and the economy, and in order to improve the country’s economic situation, these businesses need to be supported.

“Despite the challenging economic environment, we are finding that South African SMEs are still growing and that there is still an appetite for SME finance. For this reason we are aiming achieve finance approvals of over 1 billion over the financial year,” he said.

He says that in order to ensure long-term sustainability, an enhanced development impact and more profits, there has been a slight change in the company’s investment strategy going forward.

Annually, new funds will be split approximately between real assets (50%), being property investment into purchases, joint ventures and financing of owner occupied properties; traditional family-owned, lifestyle small and growing businesses (40%) and high impact and risk deals (10%).

Botes says that this year, a major focus will be placed on its latest development, a venture capital fund for entrepreneurs with businesses, concepts, products or services with high-growth potential.

“Our R400 million Venture Fund launched late last year is testimony to our belief in the potential of the South African community of entrepreneurs, despite the difficult times we may be facing,” Botes said.

He says the company is also looking to boost both its profits and development impact by investing in high growth businesses with high job growth potential in the technology, bio-technology, renewable energy and agro-processing sectors.

“We currently see a great deal of growth opportunity for SMEs within these sectors.

"These sectors are growing at a rapid rate in South Africa and the opportunities for businesses active in, or servicing, these sectors are vast.

"We aim to enable SMEs in these sectors to gear up, in order to take advantage of future economic opportunities.

“We predict that specialist businesses in fast-changing industries such as IT and communications will still have many opportunities to pursue.

"The dynamism in these industries will also ensure constant growth for innovative players,” Botes said.

He says that the rest of the African continent is also providing opportunities for SMEs.

“The rest of Africa, with its consistent growth of more than 5% over the last few years, is opening up to South African businesses like never before.

"Every local service provider hired, or every supermarket that a South African retail chain opens north of the Limpopo, provides opportunities for supply chains back home,” he said.

Botes predicts that the government's spending and corporate outsourcing will remain the drivers of the economy in the year ahead.

“The current economic slump means that corporates are increasingly focusing on their core business, and continue to outsource non-core functions that they previously kept in-house.

"Businesses that can position themselves well in these supply chains can look forward to a good year,” Botes said.

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