This is according to a report by the Department of Small Business Development and Finfind.
“Investors play a huge role in helping small businesses survive, not just with financial capital, which is greatly needed within the industry, but by providing them with on-the-ground support as well,” says Kuhle Mnisi, operator-investor at Secha Capital, an early-stage private equity fund.
Moving forward, it’s essential that we rethink the way we invest in SMEs.While there has been an increased focus on funding tech start-ups in recent years, the most ground-breaking investments are often the ones that have been overlooked by others.
“Small businesses within the agribusiness and consumer good sectors create consistent, full-time jobs, yet they often struggle to find funding,” says Mnisi. With a focus on generating a social or environmental impact along with financial return, impact investing is an alternative approach to funding, which builds businesses with purpose; “While many investors believe that there needs to be a trade-off between financial and social returns, there is a way to do well, by doing good,” says Mnisi.
Making an impact does not stop at job creation, but extends to diversity and inclusivity as well. “As we enter into a new year, which will bring its own challenges for female entrepreneurs, it’s vital that we take active steps to support women-led businesses, by providing them with the capital and resources needed to succeed,” says Mnisi.
From investing in hair network-marketing company, Wukina, to local biltong manufacturer, Stoffleberg, Secha Capital partners with operating companies who have sustainable business models and an intrinsic focus on a product or service that delivers social impact. “These industries are often considered “boring” and are overlooked by other funders – however, every time a consumer buys or invests in this service, the money they spend stays local. This is vital to ensure economic stability for South Africa, especially during trying times,” says Mnisi.
