Staff Reporter Windhoek-Securing financing to start their business is the major issue most entrepreneurs find themselves facing and that often prevents them from seeing their dreams come to fruition. However, this should not serve as a deterrent because small and medium enterprises (SMEs) play a vital role in the socio-economic development of any community. “SMEs are one of the driving forces in job creation and local economic development. They provide much of the essential goods and services for communities, especially those who are disadvantaged. It is, therefore, imperative that we find ways to aid young entrepreneurs to finance their SMEs,” Standard Bank’s Head of Enterprise Banking, Dennis Isaacs, said this week. Admittedly, financing SMEs is challenging for many financial institutions because of lack of information, which makes assessing and serving this sector difficult and expensive. “There are various factors that affect financing for SMEs, some of these can lead to added expensive costs for the SMEs, especially when they have to look at sources from outside the formal financial sector for funding, thereby hindering the sector’s growth. All hope is not lost, as there are ways to navigate around this to ensure that you can secure funding for your SME,” he explained. Isaacs advised that the rise of alternative, technology-enabled means of financing, such as new business models based on advanced data analytics, supply chain and e-commerce-based finance and other innovations may offer a way out. He pointed out that innovations in supply-chain financing and government procurement; the use of technology to reduce risks and enhance efficiency lead to lower costs; securitisation and other means of obtaining capital relief for traditional sources of finance; and introduction of non-traditional sources of long-term capital and capacity building for both financiers and SMEs, are some of the ways funding can be secured. Additionally, the need to catalyse the exchange of knowledge, expertise and experience from both the demand and supply sides, creating a shared approach to common issues is also imperative to the cause as it will help create scale and momentum for SMEs. “Thanks to innovations and technological advancements, there are insurmountable ways for people to raise funds for their SMEs outside of the traditional norms we are used to. Crowdfunding, bootstrapping, factoring, are just some of the ways that people can use to raise funds but each of them come with their limitations so you have to choose which best supports your business,” Isaacs concluded.
New Era Reporter
2018-03-12 12:36:01 1 years ago