In a landmark move poised to reshape funding landscapes for South Africa’s small and medium enterprises (SMEs), Old Mutual SMEgo and JSE Private Placements have unveiled a collaborative supply chain finance (SCF) platform. This strategic alliance brings together the strengths of established capital infrastructure with cutting-edge tech to address the persistent funding challenges that SMEs face.
At the heart of the launch was a keynote address by Saki Zamxaka, CEO of the Gauteng Enterprise Propeller (GEP). He highlighted an enduring trust deficit between SMEs and financial institutions, calling for a concerted effort from both public and private sectors. “We need to address the trust deficit… by finding partners who can contribute to a facility designed to fund SMEs,” Zamxaka said. He emphasised the importance of enabling black-owned SMEs to not only survive, but truly thrive through meaningful engagement.
A dynamic panel discussion titled Corporate Commitments and Financial Innovation, chaired by Noluthando Bobani from Old Mutual SME, explored how advancements in funding models and technologies can support SMEs more effectively. Panelists included:
- Lerato Sebata (ROI Group)
- Thabang Hleza (Old Mutual Masisizane)
- Mbulelo Ntlontli (Aurik Investments)
- Sifiso Tshabalala (JSE)
Key insights:
- Funding Readiness: With SME approval rates hanging between 3% and 5%, business agility is paramount. Many SMEs grapple with cash flow gaps that constrain operations and payroll, making SCF a vital tool for bridging these shortfalls.
- Digitalisation & AI: Digitally powered platforms, data analytics, and AI are reshaping how funders assess SMEs, delivering faster onboarding, deeper insights, and more accurate risk assessments beyond what’s revealed in a balance sheet.
- Regulatory Reforms Needed: To amplify impact, the panel advocated for government-backed guarantees to financial institutions and regulatory measures to ensure transparency and fair interest rates, making SME funding both accessible and sustainable.
- Focus on Scaling: For sustained SME growth, entities must evaluate the true cost of funding and large corporations should avoid procurement concentration by intentionally diversifying to include SMEs, thus bolstering their opportunities to scale.
Sam Mokorosi, Head of Origination and Deals at the JSE, noted that this collaboration “marks a pivotal moment for JSE Private Placements.” By tapping into the JSE’s capital markets expertise and Old Mutual SMEgo’s technological innovation, they intend to build “a powerful platform to drive inclusive growth, originate impactful deals and strengthen procurement ecosystems.”
Echoing this sentiment, Nobesuthu Ndlovu, Director of SME at Old Mutual Corporate, emphasised the role of SCF in unlocking much-needed working capital for SMEs. She remarked: “Our strategic partnership with the JSE Private Placements is part of our efforts to make the funding journey better understood and more accessible.”
What This Means for SMEs
- Enhanced Liquidity: SCF offers a quick and efficient solution for bridging short-term cash flow gaps, enabling SMEs to manage operations and fulfil contracts without delay.
- Improved Access through Tech: Digital platforms and AI streamline funding access, making the process faster, more precise, and less dependent on traditional financial histories.
- Strengthened Ecosystems: Corporates integrating SCF can contribute to a more resilient, inclusive supply chain, spreading economic benefit across diverse SME ecosystems.
- Policy Imperatives: Government frameworks and incentives are critical to support and scale the initiative by bringing structure, transparency, and sustainability.
How to Get Involved
SMEs interested in exploring SCF solutions through this initiative can find more details at:
- SMEgo: www.smego.co.za
- JSE Private Placements: www.jseprivateplacements.co.za
This joint venture between Old Mutual SMEgo and JSE Private Placements marks a promising step in democratizing access to finance for South Africa’s SMEs. By combining technological capability with market credibility, and advocating for regulatory support, this initiative seeks to close the trust and liquidity gaps that have long stalled SME growth.
