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This week Absa officially opened an exclusive entrepreneurship centre in Newtown, Johannesburg. The flagship Centre of Entrepreneurship is part of eight similar centres across South Africa and comes in addition to R250-million in non-traditional lending that Absa committed to in 2013 aimed entirely at the SME sector in the country.
The main objective of these Centres of Entrepreneurship is meant to increase cooperation in the development of small businesses through the transfer of skills such as financial literacy, knowledge sharing, mentorship, networking opportunities, infrastructure and HR expertise. All of which are of utmost importance to further develop an enabling environment for entrepreneurs to grow in South Africa.
Chairman of Barclays Africa Group which Absa is a member of, Wendy Lucas-Bull said that while Absa will be investing heavily in this sector financially, it’s also planning on supporting entrepreneurs by other means:
“The goal we have set ourselves in the SME sector requires us to be more than simply a financier of new start-ups. It requires us to play a meaningful role by supporting entrepreneurs beyond just their financial needs. Funding is of course vitally important, hence our R250-million commitment this year to help SME businesses prosper that typically would not meet normal lending criteria.”
As such, by recognising a lack of business management skills contributes to the country’s high failure rate among SMEs, Absa says its entrepreneurship centres will also provide infrastructure such as computers with internet access to process business requirements with speed and ease.
Absa believes the largest obstacle facing SMEs is not financial, but rather, access to markets. The group argues that the ability to penetrate existing markets or create new markets is not easy when there are established businesses with which to compete. Happy Ralinala, Head of Business Banking South Africa concluded stating that the group also has a strong commitment to regional integration and support:
“Our intention is to connect the African continent and promote intra-Africa trade among SMEs. While funding and skills development are key to helping SMEs succeed in running their small enterprises, creating connections and giving them access to markets, information and non-financial support is crucial to the success of these businesses.”