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Creating an environment where women and youth entrepreneurs can thrive

Article written by Ronnie Mbatsane (Managing Executive for SME Business & Sanah Gumede, Managing Executive for Strategy and Customer Value Management at Absa Relationship Banking)

The past few years have been difficult ones for South Africans. We have faced the COVID pandemic, intensified load shedding, civil unrest and natural disasters to name a few. Not only have these challenges interrupted our daily lives, but the environment has changed significantly as a result with profound social and financial implications for individuals as well as businesses. According to the Africa Report, a significant portion of South Africa’s young people are now unemployed, with women making up two-thirds of the job losses during the pandemic.

To improve the situation, stimulate economic activity, create jobs, alleviate poverty, and uplift living standards, no stone should remain unturned to support Small and Medium-Sized Enterprises (SMEs) and entrepreneurship as these businesses are key to solving this conundrum.

While South Africa is known for its entrepreneurial spirit, and there’s no doubt that the country is full of opportunity; South African entrepreneurs, particularly women and youth, face unique challenges. In many cases, women entrepreneurs must juggle the responsibilities of a home and family against business demands. Equally, they may struggle with various barriers, including access to finance, financial literacy, training, business consulting and socio-cultural constraints.

According to Mastercard’s Index of Women Entrepreneurs 2021, women-led businesses in South Africa make up only 21.9% of the formal SME sector. Although valuable contributors to our society, women-owned businesses remain far fewer than men despite focus on supporting women entrepreneurs in the past few years.

The findings are not much better for youth entrepreneurship. According to the Q2 Quarterly Labour Force Survey released by Statistics South Africa in August 2023, youth between the ages of 15 and 24 years, and 25 and 34 years recorded the highest unemployment rates of 60.7% and 39.8% respectively. Yet, the number of young people involved in entrepreneurial activity remains extremely low at 4% of the total youth population aged 15 to 34, according to the State of Small Business in South Africa Report. One of the reasons for this under representation of economic participation among young people can be attributed to a lack of skills or experience.

The need for youth participation is becoming more and more vital. Youth entrepreneurs tend to break away from tradition and are more adaptable to embrace disruptive technologies thus reducing the dependence on obsolete systems and conventional business models. The current need to embrace this approach was highlighted during COVID.

Against this background, considering Absa’s commitment to empowering Africa’s tomorrow, together, one story at a time, and in creating communities where women and youth entrepreneurs are supported, we have launched a unique banking solution, specifically designed with these business owners in mind.

We believe appropriate resources and sharing of experiences can go a long way in unlocking the potential of women and youth entrepreneurs. The Absa Business She Thrives and the Absa Emerging Entrepreneur propositions offer both financial and non-financial support to help businesses grow and prosper.

Key learnings that emerged from our relief efforts during the initial COVID lockdown period, was the realisation that there is a need to tailor specific solutions to suit each businesses’ unique circumstances and requirements.

Many first-time entrepreneurs in South Africa struggle to run a business. They may have a fantastic idea and the skills necessary to run with the idea, but limited knowledge when it comes to registering the company, managing accounts, marketing and managing the business.

Through this offering, we have identified a set of business development support and tools enabling business owners to better manage their day-to-day operations such as an integrated accounting tool called the Cash-flow Manager. This allows access to real-time business analytics, the production of online quotes and invoices, and access to a full payroll feature.

Besides the various elements embedded in the proposition, women and youth will gain access to expert advice and guidance from Absa’s Relationship Bankers on starting and growing a business as well as funding. They will also receive access to learning and networking opportunities through the National Small Business Chamber (NSBC) and the social enterprise, Lionesses of Africa.

South African entrepreneurs continue to start new and exciting small businesses every year and at Absa, we want to be active partners throughout their journey. We are keen to support and enable the SME sector and look forward to engaging with business owners to find solutions for their specific needs. We encourage SMEs to come and speak to us.

Absa is a proud Platinum Partner of the NSBC

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