Problems Getting Finance is one of the Top Reasons South African Entrepreneurs Fail Almost 30% of the country’s entrepreneurial businesses shut their doors last year due to difficulties in accessing the funding they needed.  It was the second major reason for the discontinuance of South African businesses, following only after failure to maintain profitability. These are the findings of the latest Global Entrepreneurship Monitor (GEM) South Africa Report, an annual study, now in its thirteenth consecutive cycle that generates relevant information on entrepreneurship, and enables South Africa to compare its entrepreneurial activity against the efforts of other African and international countries.    GEM also reports that with an established business rate of just 2.9%, South Africa significantly lags behind the Sub-Saharan African average of 16%.  The low level is significant because it is these businesses that are providing the bulk of the country’s employment op...

Traditional Conservative Bank Lending Models Are Not Supporting SA Small Business Owners  Small businesses in South Africa provide more than 65% of the country’s total employment and contribute over 50% towards the country’s Gross Domestic Product (GDP). However, accessing finance from banks is a particularly difficult process that often doesn’t have a positive outcome. In fact, if you consider that five out of seven SA SMEs fail in their first year of trading, mostly due to cash flow problems; it is clear that improved financial support could empower more SMEs to realise their potential and significantly grow the South African economy. Yet, South African banks are not challenging the historical lending processed to provide innovative solutions to support SMEs with improved access to finance. They remain locked into process and security driven lending models that systematically exclude many SMEs. At the core of the issue is the inflexible, heavy weight of banking structure and...