10 May 2016
Absa signs MOU with George Municipality
Absa Bank Ltd (Absa), a subsidiary of Barclays Africa Group Ltd, and the George Municipality have signed a three-year Memorandum of Agreement seeking to enhance the business capacity and acumen of Small and Medium Enterprises (SMEs), as well as increase their level of exposure to businesses which require their services.
Fifty SMEs, as identified by the George Municipality, are expected to participate in the programme. Those which are successful under the Municipality’s tender process, will be able to apply for loans from Absa in order to obtain working capital or expansion finance to meet their tender obligations.
Tshiwela Mhlantla, Provincial Managing Executive in the Eastern and Southern Cape says: “Absa believes in shared prosperity, and SMEs are productive drivers of inclusive economic growth and development. This partnership will extend the bank’s business banking services to the SMEs. It will also provide financial management and financial literacy training, which will be delivered by Absa Enterprise Development Centres.”
Executive Mayor for George, Ald Charles Standers noted that for George Municipality, economic transformation is a key priority. "Opportunities for local Small and Medium enterprises to participate in municipal supply chain system must be maximised and prioritised in line with the George Municipality’s PPPFA policy framework as well as our strategic objective of growing George. Assistance that empowers SMEs to fulfil their newly awarded tender obligations will certainly expedite the transformation process, " he said
In addition to the bank’s normal lending criteria, Absa’s Enterprise and Supply Chain Development unit has committed R250 million per annum in non-traditional lending aimed at the SME sector in South Africa. This is in order to fund SMEs that typically would not meet the normal lending criteria required by banks. Last year about 9 000 SMEs were funded.
Over and above the R250 million, Absa has created a suite of specialised non-traditional funding solutions to assist SMEs, as SMEs need more than just funding to succeed as they also have other challenges.
“SMEs experience a high failure rate owing to a lack of business and financial management skills. Accordingly, all funding advanced under the programme will be linked to a non-financial support package to improve the business owners’ management skills and to provide them with networking opportunities,” adds Mhlantla.
Small businesses also often struggle to penetrate existing markets, or create new ones, especially when competing against established businesses. All businesses assisted under the programme are offered access to Absa’s Procurement Portal - a virtual marketplace that links SME suppliers with blue-chip companies and government bodies. To date there are more than 41 000 SMEs and 5 900 corporate buyers actively using the portal.
In the photograph rom left back: Ms Carli Bunding-Venter, George Municipality LED Manager, Dr Willie Cilliers, George Business Chamber, Mr Brahm Ellie, Customer Network Guest Head: ABSA George, Mr Richard Shumi, Thembalethu Business Partnership, Mr Neil Meyer, Relationship Executive Business Banking: ABSA George, Mr Thembi Klaas, Head Public Sector: ABSA Eastern and Southern Cape.
Front from left: Mr Trevor Botha, George Municipal Manager, Ald Charles Standers, Executive Mayor of George, Ms Tshiwela Mhlantla, Provincial Managing Executive: ABSA Eastern and Southern Cape, Mr Simphiwe Funani, Head Business Banking: ABSA Eastern and Southern Cape
Last published 10 May 2016