African Bank aims to capture the small and medium enterprise (SME) market by offering a suite of business services that sets it apart from competitors.
Speaking on the sidelines of the South Africa-France Investment Conference in Paris, Edna Montse, African Bank’s group chief transformation and sustainability officer, said the SME sector was underserved.
“We are the bank to assist in plugging the gap. We were built by entrepreneurs who were themselves SMEs. I think we are looking for solutions that can enable and propel the SMEs at the same time,” said Montse.
She said the group understood the SME sector and worked to offer solutions to help clients focus on running their businesses without worrying about administrative tasks.
“We have spent time doing the work. We have a number of solutions that are going to assist even the micro enterprises in the townships. We are not talking only about companies with offices in Sandton and only catering for those. Our challenge is how do we enable entrepreneurs to focus on their businesses and keep them away from the administration?”
If you are a one-man operation or a family that says ‘let us start a business’, you don’t have tax support, you don’t have human relations support. You get a call from South African Revenue Services to say you have not paid VAT; you don’t know how to fill in the form. When we support SMEs, we say, ‘let us supply you with the ecosystem, we want the business to survive'
— David Polkinghorne, African Bank’s group business development executive
David Polkinghorne, African Bank’s group business development executive, said small businesses struggling to get financing.
He said 85% of new businesses failed in the first year, and of those that kept going, 80% failed within the next three years because of lack of support. The bank wanted to meet the needs of its SME customers by giving them the support they need to thrive, he said.
“If you are a one-man operation or a family that says ‘let us start a business’, you don’t have tax support, you don’t have human relations support. You get a call from South African Revenue Services to say you have not paid VAT; you don’t know how to fill in the form. When we support SMEs, we say, ‘let us supply you with the ecosystem, we want the business to survive’,” he said.
African Bank is aiming to contribute to job creation and the development of SMEs in KwaZulu-Natal, where new luxury resorts are set to open next year.
African Bank is aiming to contribute to job creation and the development of SMEs in KwaZulu-Natal, where a new luxury resort is set to open next year.
It has partnered with the Industrial Development Corporation and Absa to provide development funding for the Club Med's resort that will offer a bush and beach experience where an investment of R2bn is expected to create 1,000 jobs.
Club Med, a French tourism hospitality group, was one of the projects highlighted by the government on the sidelines of the conference in Paris.
Polkinghorne said Club Med was an opportunity for the bank to be part of a landmark project in KwaZulu-Natal. “It facilitates massive growth in that arena; it talks to the philosophy of African Bank, which is to upscale the economy using local suppliers,” he said.
The bank has further diversified its portfolio through the acquisition of Sasfin Bank’s commercial assets, Ubank and Grindrod Bank. It has its sights set on a JSE listing after shareholders, including the Reserve Bank, indicated they were open to exiting their investment.
“Our goal is not to list for the sake of listing; it is to be a compelling proposition, meaning investors must find us attractive so that they can see potential and future growth,” said Montse.
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