As CEOs who represent most of the country’s large companies, we are committed to building South Africa’s economy.

Entrepreneurship and small businesses are central to this because they fuel growth and create jobs. Our companies have backed and funded the establishment of the SA SME Fund, which will focus on stimulating entrepreneurs and high-growth small and medium businesses. We have committed an initial amount of capital of R1.5 billion which is an exciting milestone in our investment in the future of our country.

Overview of the SA SME Fund

South Africa is at a critical juncture – the need to drive economic growth and job creation is imperative. Small and medium enterprises (SMEs) are the only entities that will create jobs at the quantum required: big business is focused on efficiencies, and Government needs to manage its budgetary constraints.

SA has high unemployment (more than five million working age SA’s without jobs), a high rate of SME failure (75%), and very low growth. It is therefore of national importance to work together to stimulate SME development.

Following the charge set by Minister Gordhan in January 2016, the CEO’s Initiative SME workstream led by Discovery founder and Group Chief Executive Adrian Gore and Bidvest founder Brian Joffe brought together experts in the public, private and non-profit sectors to explore solutions to this problem. The team has consulted widely in the last few months to understand what is required to stimulate entrepreneurial activity – from supporting the nascent Venture Capital sector to providing incentives to existing fund managers to focus on riskier portfolio investments.

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Background

“Let’s call them small green shoots in different parts of the economy. If we nurture those shoots in the right kind of way and create the right kind of ecosystems, we can certainly get back to two or three percent growth over the next two or three years.”

Pravin Gordhan – South African Minister of Finance

The market failures we have identified and hope to influence

The ‘funding gap’ in the early stages

There is a strong risk aversion amongst traditional market players to fund SMEs that are still in the scale-up phase: illiquid equity markets and lack of exit opportunities compound this problem.

Lack of access to C-suite level mentors

There are many professional services firms and mentors: however, access to such resources is generally constrained for most SMEs; and the quality of these resources is often variable. 

Working capital constraints due to late payments

A common issue for SMEs, regardless of size or sector, is the issue of working capital. Overdue invoices is a major source of failure for these companies.

Our aim for the SA SME Fund

Our aim is to create a substantial fund that coinvests with fund and investment managers we accredit. We will seek to grow the private sectors initial R1.5bn investment, with the aim that over time, the public sector will contribute matching funds. The Fund will provide high-potential entrepreneurs and enterprises with access to a strictly-governed ecosystem, comprising proprietary networks of accredited funders and best-of-breed mentors and professional services firms.

* Please note: The SA SME Fund will only be investing together with fund or investment managers we have accredited – we will not fund any SME directly.

Background

The initial response to the Fund has been tremendously positive on both the investment and mentorship side. We have committed an initial amount of capital of R1.5 billion which is an exciting milestone in our investment in the future of our country.

As CEOs who represent most of the country’s large companies, we are committed to building South Africa’s economy.

Adcock Ingram:  Andrew Hall

Anglo American Platinum:  Chris Griffith

Arrowhead Properties:  Gerald Leissner

Barclays Africa:  Maria Ramos

Bidcorp:  Brian Joffe

Bidvest:  Lindsay Ralphs

Capitec Bank:  Gerrie Fourie

CIG:  Raoul Gamsu

City Lodge Hotels:  Clifford Ross

Coronation Fund Managers:  Anton Pillay

Curro Holdings:  Chris van der Merwe

Distell:  Richard Rushton

Discovery:  Adrian Gore

Firstrand:  Johan Burger

Growthpoint:  Norbert Sasse

Hollard:  Nic Kohler

Imperial Holdings:  Mark Lamberti

Investec Property Fund:  Nick Riley

Investec Ltd:  Stephen Koseff

JSE:  Nicky Newton-King

Kumba Iron Ore:  Themba Mkhwanazi

Liberty:  Thabo Dloti

Mediclinic International:  Danie Meintjies

MMI Holdings:  Nicolaas Kruger

Mr Price Group:  Stuart Bird

MTN Group:  Phuthuma Nhleko

Murray & Roberts:  Henry Laas

Nandos:  Geoff Whyte

Naspers / Multichoice:  Imtiaz Patel

Nedbank:  Mike Brown

Netcare:  Richard Friedland

Old Mutual:  Ralph Mupita

PIC:  Daniel Matjila

Pioneer Foods:  Phil Roux

PSG Group:  Piet Mouton

PSG Konsult:  Francois Gous

RCL Foods:  Miles Dally

Rebosis Property Fund:  Sisa Ngebulana

Remgro:  Jannie Durand

Richemont:  Johann Rupert

RMI:  Herman Bosman

Sanlam Limited:  Ian Kirk

Santam:  Lize Lambrechts

Sasol:  Bongani Nqwababa, Stephen Cornell

Standard Bank Group:  Sim Tshabalala, Ben Kruger

Steinhoff/Wiese Group Companies: Christo Wiese

Sun International: Graeme Stephens

Telkom:  Sipho Maseko

The Spar Group:  Graham O’Connor

Vodacom Group:  Shameel Joosub

Zeder Investments Limited:  Norman Celliers

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