Stimulating economic growth and job creation

Small businesses play a critical role in any country because they can stimulate the economy and provide jobs. But when these small businesses are rooted in local communities, they play an even more important role by providing goods and services, generating revenue, reducing poverty and contributing to community development.

Sadly, though, statistics show that 20% of small businesses fail within the first year and nearly half will shut their doors before they reach five years. The most common reason for failure among small businesses is cash flow, and when they do have financial difficulties, many of these businesses cannot access finance or alternative financing options.

It is for this reason that Marula Community Chrome (MCC), using proceeds it receives from the Makgomo Chrome project, will be launching the Small Business Loan Project.

Working with an experienced lending institution, MCC will provide tailored loan solutions to help small and medium enterprises (SMEs) within its six local communities to survive and thrive.

Initially, the focus will be on short-term funding for existing and established SMEs to help them achieve profitability. Over time, the project scope may be extended to include funding for new start-up enterprises who meet certain criteria.

In many cases, existing SMEs might need funding to develop a new idea, to deliver on an important contract, or to take advantage of an opportunity. Before the funding is agreed though, the lending institution will conduct a robust assessment and verification process on the business, its leadership and the reason for the funding request to ensure that there is a reasonable chance of success.

If an application is unsuccessful, the lending institution will offer advice and recommendations on how to improve the business plan so that future funding applications may be successful.

Also, small business owners often have a good business concept and an accessible market, but they lack the business skills needed to create a successful business, such as the ability to perform or understand basic accounting principles, operate computer software, or work within certain legislation. In this instance, the application may not be immediately declined but rather the business owner could be sent for training to learn the necessary skills before the application is reconsidered by the lending committee.

The Small Business Loan Project will be guided by certain principles that are aligned to the objective of supporting local economic growth and job creation. These include:

• Flexibility and innovation in developing loan solutions for the unique needs of each business.
• Commitment to the growth and empowerment of local entrepreneurs.
• Responsible and sustainable lending practices, strictly adhering to ethical business practices and regulatory requirements.
• Efficient and transparent processes that are easy for borrowers to navigate.

“We have now reached a high level of transformation aimed at improving the lives of our people and fostering economic empowerment. We hope that by facilitating access to financing for small businesses in our six communities, we can help to stimulate local economic growth and job creation,” saidOupa Kgoete, Chairperson of Audit and Risk Committee, MCC.           

Applications for financial support can be made at the Zoop Finance offices in Ga-Manyaka, Steelpoort and Burgersfort.