By Natisha Lazarus
It’s a tough time for entrepreneurs, between interest rate hikes affecting the bottom line and eating into cash flow and fuel price hikes that push the costs of doing business even higher. Add inflation, skills shortages, load shedding, and the onerous administration that’s synonymous with running a small or medium enterprise (SME) in South Africa, and it’s easy to see why the country’s emerging companies need all the support they can get.
Business owners need to consider the impact that future interest rate hikes will have on their business, the knock-on effect on their ability to service their debt, and find ways to stay sustainable.
Working capital management is a crucial focus for small business leaders during this time when macro-economical factors make for a complex operating environment, with many business owners not understanding what type of finance will best fit their operating model.
They are generally engaging with ‘Big Banks’ that don’t have a deep understanding of their business and its funding requirements. As a result, businesses are seeking to build relationships with banking executives who have a love for finance, a passion for innovation, and a commitment to helping each client find the most holistic solution possible for their particular business.
While lending may be a catalyst for a business owner to approach a bank, each business owner has unique needs and risk-based characteristics that influence their banking relationship.
There was no better time than Women’s Month to highlight that women entrepreneurs are great business partners for Sasfin, and we’ve noticed that woman-owned and -led businesses are contributing more than ever to the economy.
Women tend to be quite conservative when it comes to acquiring debt, as they have a deep understanding of the impact of the ever-changing economic cycles and the knock-on effect to service debt.
Our close relationships with our customers over the years have shown us that loans granted to female customers have a greater chance of recovery because they make it their focus to be in tune with macroeconomic events.
Sasfin’s support of this sector is enhanced by a R600 million funding portfolio against a secured guarantee from FMO, the Dutch Entrepreneurial Development Bank, which was designed specifically to provide loans to women, youth, and businesses impacted by Covid-19.
This arrangement made Sasfin the first bank in the world to receive the NASIRA guarantee after its focus on financial inclusion and innovation was highlighted.
The guarantee makes it possible for the bank to provide women entrepreneurs with working capital solutions that are more flexible, and our business banking team is determined to assist each business owner with funding that is aligned to their business cash flow requirements.
Women in business are particularly good at nurturing growth, inside our own teams and with the clients we engage with. While strategic decisions should always be underpinned by economic value, sometimes you need to combine your head and your heart, and bring the human element to decision making.
Natisha Lazarus is Head of Business Banking at Sasfin
BUSINESS REPORT