Ask any SMME owner what one of the persistent obstacles is to turn their business into a success – funding is often listed as the main concern. And for this reason, Mianzo Asset Management in collaboration with Black Umbrellas, set up a fund this week to help SMMEs with growth finance.
Mianzo, which was founded in 2010, manages assets in excess of R8-billion on behalf of 22 clients. Its name means new beginnings in Kiswahili. Black Umbrellas is an incubation organisation, supported by the Cyril Ramaphosa Foundation, which was launched by entrepreneurs Mark Frankel and Charles Maisel to help SMMEs over 10 years ago.
The non-profit organisation has incubated more than 2200 SMMEs that are 100% black-owned. These SMMEs have in turn created and preserved more than 12,000 jobs. They aim to raise R100-million for the project, which is known as the Black Umbrellas Mianzo SME Debt Fund. It will provide loans to 51% of black-owned SMEs in South Africa.
Founder and Portfolio Manager at Mianzo Asset Management, Luvo Tyandela, said that investors who put money into the fund would contribute to creating jobs. “Development finance institutions, pension and retirement funds that invest in the fund will be able to contribute to investments that stimulate the economy and job creation,” Tyandela said.
“We will use our experience to offer solutions that enable beneficiary SMEs to reach their growth potential.
“Mianzo was a recipient of the National Empowerment Fund’s Imbewu Fund in 2012, and so we have the first-hand experience in understanding the expectations of companies when they receive funding,” Tyandela also said. He said that by collaborating with Black Umbrellas, his firm believed it would play a role in helping achieve the economic recovery objectives outlined by the president.
“They (SMEs) will benefit from the collaboration, with Mianzo bringing its fund management expertise to the table, while Black Umbrellas has a proven track record in successfully incubating SMEs across a range of economic sectors,” Tyandela said.
Frankel said a recent study by the Shell Foundation in partnership with the Omadyar Network, found that funds that provided technical assistance to SMMEs operating in emerging markets, helped them grow their revenue by 44%.
“We believe that the combination of financial and non-financial support will be invaluable in helping to accelerate and scale Enterprise and Supplier Development (ESD) suppliers within corporate supply chains in these challenging times,” he said.
“We need to build local, resilient risk-mitigated supply chains and the Black Umbrellas Mianzo SME Debt Fund will be a key enabler in ensuring this happens.”
South Africa, like many other countries, has identified SMMEs as key to growing the economy and creating jobs.