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The SiMODiSA Association recently conducted research on key challenges hindering SME development in South Africa. The survey is entitled Accelerating the Growth of SMEs in South Africa and aims to reveal the hindering factors affecting the growth of startups and the scaling of businesses in the country.
The survey was compiled in partnership with the Impact Trust, and endorsed and supported by First National Bank (FNB), Omidyar Network Africa, and the South African Venture Capital and Private Equity Association (SAVCA).
In a press release sent to Ventureburn, the MD of SiMODiSA, Matsi Modise, commented on what the survey details:
The survey is an important intervention because it provides firsthand insights around the main factors which negatively affect entrepreneurs. We believe that the findings provide an outline of building an enabling ecosystem which will not only lead to a flourishing SMEs base but create sustainable jobs.
According to SiMODiSA, there are an insufficient number of institutions providing the necessary training and practical exposure required to support a thriving high-tech industry.
As with the Ventureburn Startup Survey, SiMODiSA’s research found funding to be a hindrance for startups. According to the data, South Africa still requires early-stage angel investors and a more mature venture capitalist market.
The country’s geographical location is an obstacle for startups. This proves to be troublesome when entrepreneurs are looking to access international markets, like the US, UK or Europe. The limited support entrepreneurs receive limits partnerships with corporates, mentors, and networks to provide them with a ‘soft landing’.
Universities and students are innovating in different spaces, but as with many entrepreneurs are finding it difficult to create supportive relationships. Not enough of these innovations are being successfully commercialised. There are some institutions, such as Nedbank’s Launchlab, which has partnered with Stellenbosch University to help budding entrepreneurs.
Head of Enterprise Development at FNB, Heather Lowe, states the findings have insight into what hinders entrepreneurs:
We cannot continue to speak rhetorically about the challenges which have stagnated SME development over the last two decades. Both public and private sectors need to work with entrepreneurs on solutions to address these challenges.
The press release didn’t state any specific numbers or how the research was compiled.