Episode Transcript
[00:00:01] Speaker A: On the street, on the air, Inside your business on KAIA Biz is brought to you by Capitec Business Banking.
[00:00:08] Speaker B: Kaya Biz. Inside your business.
[00:00:12] Speaker A: Yep. Time to get inside your business. And as you know, we are incredibly passionate about speaking about the themes of entrepreneurship and SME confidence in South Africa. And one thing's for certain is that whilst we do know that many entrepreneurs are plagued by several challenges, whether it be access to capital, access to markets, managing regulation and red tape, we typically do see that we see the confidence of SMMEs climbing this year in 2025. To help us unpack what these figures reveal, what's shifting in the market and most importantly, driving growth, we're joined by David Morobe, Executive General Manager for Impact Investing at Business Partners Ltd.
Such a pleasure to touch base with you again. Excited to speak to you.
[00:00:57] Speaker B: Thank you very much for having me and it's good to be on the show again.
[00:01:01] Speaker A: You often get to sit at the coal face of the challenges that entrepreneurs do face, but also highlight a lot of opportunities and successes that you've witnessed. And I'm quite keen for you just to share with us in your observations, you know, how the confidence level has been shifting, especially within the last two to three years, but more so within the first six months of 2025.
[00:01:23] Speaker B: Yeah. Notwithstanding that, we are at the core phase, as you say, we try and get the, you know, the opinions of our entrepreneurs. We do quarterly survey where we gauge their buoyancy and also how they feel about social and economic issues.
So the last feedback we had from them, notwithstanding the challenges that we are facing in the country, they were quite optimistic about the economic climate in 2025.
They felt that the economy would support their business growth. I think close to 70% felt like that.
There's still a huge demand for access to business finance and about 84% of them felt their businesses would grow in the next 12 months.
But there have been several developments since the first quarter, as we all know. There's been this high tariff environment that has been coming up from the US and we're hoping that in the next confidence index or the survey that we'll be conducting will get a better feel of. Are they still as bullish, are they still as confident of their future prospects?
[00:02:34] Speaker A: What's driving the increase in their confidence?
[00:02:38] Speaker B: Well, I guess they just. The first element was that the GNU seems to be stable up to the last, the first quarter of this financial year where they felt the stability, there's policy certainty.
The access to finance environment has been very competitive with Many people or many financiers getting into the space targeting small and medium enterprises. So in the last two, three days, even at the G20, you know, preparations, there's a whole focus on the SME environment and SMEs are not oblivious and not ignorant of what's happening in that respect. I think all these factors are sort of underpinning their confidence in their prospects.
[00:03:22] Speaker A: And I think this is important, right, because over the last year we've seen reduced level of load reduction and load shedding. We do see that there's a heightened level of focus to bring in the voice of entrepreneurs focused on the national agenda. And I guess there has been some sense of stability slightly so when it comes to the government of national unity. But I'm keen to unpack, you know, what you are also witnessing at and as business partners. Now, we've spoken to yourself and your colleagues many times to get a better understanding of the kind of support that entrepreneurs have as well as the resilience that's required in order to sc. And I'm quite keen, you know, if you're seeing a shift as well, practically speaking, in terms of scale as well.
[00:04:05] Speaker B: As access to markets, I think they're still feeling strong.
One of the other aspects other than the responses to the survey is just the appetite for taking on additional finance to either start or grow their businesses. There's been an uptick in the number of businesses that has come through. We've seen their performance quite stabilized, remember, against the backdrop of what happened during COVID initially and then the long bouts of load shedding, as you rightfully point out. They've been actually quite remiss of me to miss that aspect, that the load shedding also sort of increased their buoyancy and optimism. Hence we've seen an uptick, if you look at the year on year growth in people that have come through for growth finance, that has increased tremendously. And we are quite confident in what we are seeing in the first six months of the year that that trend up as we proceed.
[00:05:01] Speaker A: And are we finding that entrepreneurs are also becoming better prepared?
And I ask this because I'm aware business partners does offer funding but also mentorship to many entrepreneurs. And one of the challenges that institutions like yourselves and your peers tend to experience is that, you know, we'd come knocking on your door looking for funding and support, but we're not adequately prepared even when it comes to the basics of having our financials or compliance in order. Is this also something that's shifting in terms of behavior of entrepreneurs shifting a great deal.
[00:05:32] Speaker B: And also there are a whole lot younger entrepreneurs coming to the fore. I think for the first time, we're seeing quite an increased number of millennials coming through into the entrepreneurial space. And I think in the not too distant future, there will be a lot of Gen Z coming through. So their attitudes towards preparation and making sure that they are ready to take on whatever comes along their way seems to point to a trend that points to exactly the point that you're raising, that they are more prepared as they come through to us. You're right that we need to leverage technical assistance because there's always an area of weakness that will show through when we do our due diligence. And we hope to be able to fill that spot through experts that we have on our mentors database that we can leverage for the purpose of helping those, especially the younger ones, who might be blind to certain challenges that they may face where they have a sounding board where areas of their weaknesses can be addressed thereby.
[00:06:34] Speaker A: And I think this is so important because as you say, you're seeing that shift in our behavior and our preparedness. So it's beautiful to see that the messaging is landing for entrepreneurs. Preparedness is there, and as a result, the support is also being offered from institutions like yours. I also know that as business partners, you've often acknowledged entrepreneurs who have broken barriers, innovated sustainably, and also impacted communities and societies in a favorable manner. And over the years, the likes of Theobaloi of Batu come to mind. I also think of the likes of Sheldon Tatchel of Legends Barber. There's so many more as well from different sectors who have contributed to the economy, but they've also been acknowledged through the Entrepreneur of the Year awards that you typically host as business partners.
Take us through, you know, the levels of recognition and why these, you know, awards matter. It's great to receive as an entrepreneur, but talk us through the events evaluation process, but also life after the awards that you've typically witnessed for many of these entrepreneurs.
[00:07:33] Speaker B: Well, if you look at the scale of needs for entrepreneurs, you mentioned the issue of access to finance. There's the issue of just support in the form of mentorship and any form of technical assistance. Then business premises comes out quite strongly as an area where they need affordable premises, where to trade and where they can secure their tenure of occupation and be able to play successfully. But one thing that has come through over the years is the issue of advocating for those that are doing well. And that advocacy element for us includes not just fighting for Say for them to be paid on time, but to celebrate those that are doing well. So through our Entrepreneur of the Year awards competition, we celebrate the vision, the passion, the innovation and commitment of those individuals that are running successful small and medium enterprises and who are able to succeed in spite of the odds. This competition has been going since 1989 and I've had the privilege of being part of the competition, at least for the last 30 years. And I've seen so many good entrepreneurs come through. We had a bit of a hiatus during the COVID period. So from 2020 to 2022, we didn't run the competition due to the lockdown strictures that we faced as a nation. But from 2023, we returned the competition, we revitalized it and we had Theo Baloy win in 2023. In 2024, we had another dynamic entrepreneur, all coming from underprivileged backgrounds, but have managed to scale in spite of the challenges. They've made it even through the load shedding, even through the regulatory burdens. And we are showing to them that if we don't celebrate such people, we will not be able to stimulate that spirit of entrepreneurship that contributes to the heightened level of preparation that we see because young people are seeing role models that are able to do it in spite of.
[00:09:36] Speaker A: Yeah, definitely. We never know who's listening. There might be an entrepreneur who says, hey, I'm hoping that I can leverage this opportunity and participate and engage and maybe even win.
Talk us through when the awards are taking place and perhaps if there's an opportunity for entrepreneurs to apply, but also how best they ensure that the entry is competitive upon their entry.
[00:09:58] Speaker B: Yeah, well, the entries are open. At the moment. We are inviting our entrepreneurs to enter for the 2025 iteration of the Entrepreneur of the Air competition.
The best way to enter is to go to the website of TheEntrepreneur EOY. So it's www.eoy.co.za.
the entries or the call for entries will run up until the end of August. And so we saying all entrepreneurs that are tracking, there's an opportunity for you to enter. We sort of recognize a variety of categories.
We have the emerging, which means the entrepreneurs that are under 10 million. We've got a small business category which will take up to 50 million and then we have the medium sized businesses that can go above 50 million and beyond. So I mean we can, we cater for all of them and any one of them could win the overall Entrepreneur of the year because we'd look at their journey to get to where they are at the time of the judging of the competition. So we're inviting all and sundry. I must also add that we have special categories to recognize those that are job creators because you might find that some businesses do well financially but are not job intensive. So with the challenges that we have with unemployment, we recognize those people and we might from time to time also have those that have shown innovation that deserves special awards of recognition.
[00:11:33] Speaker A: Definitely. Thank you so much for your time this evening and for reminding us of the important role that entity like Business Partners does play for entrepreneurs in the country.
Again, offering financial assistance, whether it's asset backed, of course, trying to ensure entrepreneurs also gain access to funding to grow their businesses, mentorship and the technical skills that are required. And even more so, the acknowledgment through the awards. So all the best through the judging process. I can imagine it's not easy, but you must be inspired by the amazing stories you hear.
[00:12:03] Speaker B: Never easy, but it's very rewarding. Thank you so much for having me.
[00:12:08] Speaker A: Thank you so much. That's David Morobe, Executive General Manager for Impact Investing at Business Partners Ltd. It's exactly five minutes after 7:00'. Clock. You're listening to Kia Biz.
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