By: Anna Majavu
Absa says it is willing to offer up to R5 million loans to new and existing women and youth SMMEs whose owners have nothing to put up as collateral. The loans will be offered as part of the Absa Emerging Entrepreneur and Absa Business She Thrives packages that were launched this week. SMEs who are new and existing clients of ABSA with an R0-R20m turnover may qualify said Absa SME Business managing executive Ronnie Mbatsane.
The bank is deliberately offering unsecured loans because small businesses that do not yet have a strong balance sheet often struggle to put up anything as collateral. All businesses that take out the loan will get support from the bank. “We have a very mature enterprise development framework that we have developed over time where we look at alternative forms of credit lending,” said Mbatsane.
He added that the loans would come with a raft of non-financial support measures for smaller enterprises to make sure the fledgling businesses escaped the SMME curse of going bankrupt within the first three years. “Historically the biggest problem is the ability to manage businesses. It is not really access to funding,” he added.
Absa has arranged with the National Small Business Chamber (NSBC) to offer masterclasses to the SMMEs and will give all borrowers a year’s free subscription to specific SMME management courses from Udemy, a global learning platform. These kinds of online learning programmes, which would otherwise cost the SMMEs between R10,000 and R20,000, will help minimise the risk to the bank. The SMMEs will also get a monthly fee waiver for six months on a new account, free access to accounting tools, a 35% discount on insurance premiums, and free roadside assistance. Absa will waive the initiation fee on the loan, and SMMEs who buy business premises will qualify for up to 50% off their bond registration costs.
Absa will also connect the women entrepreneurs to Lionesses of Africa, a social enterprise that offers free mentoring and networking for over one million women-owned businesses across the continent. Sanah Gumede, head of Strategy and Customer Value Management at Absa, said the Business She Thrives package for women would also “provide exposure to markets and resources otherwise not readily available to these businesses”.
Double rewards points would be offered to clients who buy from the SMMEs that Absa supports so that the SMMEs get more customers, Gumede told Vutivi News. “There is global recognition that the economic empowerment of women can create fertile ground to change the trajectory for families and communities. By launching this solution, we want to play our part in supporting youth and women entrepreneurs through an offering that removes obstacles and authentically serves these individuals,” Mbatsane added.