The participation of SMEs, who account for over 80 % of Africa’s employment, remains negligible in the economy, primarily due to limited access to significant resources required to finance necessary infrastructure, equipment and operations. This scenario stifles economic diversification and equitable growth, thus perpetuating negative social consequences such as poverty, illegal migration and trade, human trafficking and so on. The most common and persistent financing obstacles for SADC SMEs are:
- Lack of medium to long-term finance for start-ups and expansions;
- Inappropriate terms and conditions for short-term credit or trade finance;
- Insufficient financing and other instruments to support the SME sector;
- Low capitalisation and lack of collateral; and
- Poor record keeping and/or financial management.
At BFS, we understand that SADC SMEs’ financing challenges are not a consequence of lack of capital on the market, but rather, the unavailability of appropriate growth capital. Most high growth oriented SMEs are operating in survival mode due to the lack of corresponding balance sheets, infrastructure and historical financial performance required to access traditional commercial debt. We also recognise the fact that enterprise financing needs vary at different development stages, and require alternative dynamic funding types. As such, BFS believes in the provision of sustainable financing solutions which is a collective effort.