Business Partners approves over R1bn in SME funding over the last 12 months

Ben Bierman

During the last financial year, Business Partners Limited (BUSINESS/PARTNERS) - a leading risk financier for SMEs in South Africa and selected African countries - approved R1.049 billion in funding through 295 investments for small and medium enterprises.

This is according to Ben Bierman, Managing Director of BUSINESS/PARTNERS, following today’s release of the company’s 2017/2018 financial results. “Of these new investments, we are pleased to report that financial assistance to black entrepreneurs increased to 40.5 percent compared with 27.4 percent in the previous financial year, and finance assistance to female entrepreneurs improved to 37 percent (34 percent: 2016/2017),” he adds.

“Placing over R1 billion 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, notes Bierman. “Net profit attributable to equity holders increased by 5.4 percent, amounting to R218.4 million. The investment portfolio grew by 7.5 percent to R2 956 million. Interest income by 5.8 percent to R405.1 million.”

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 percent for the second consecutive year. Another positive was the reduction in net credit losses by 5.7 percent to R76.3 million, in spite of the year’s tough economic environment and increased levels of credit risk.”

On a more positive note, Bierman points to the latest Business Partners Limited SME Confidence Index, which 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.

“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,” he warns.

Among the key conclusions that Bierman says the company has made after compiling these results, is that 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.

“Given the expectation that South Africa’s economy will recover, albeit at a moderate pace, Business Partners Limited will continue to position itself to better serve the SME sector, increase the impact on SME formation and sustainability and thereby contribute to economic recovery and job creation,” Bierman concludes.