The Western Cape Government Department of Economic Development and Tourism (DEDAT) has collaborated with the Johannesburg Stock Exchange (JSE) to address the funding gap for Small and Medium Enterprises (SMEs) in the Western Cape. In a Capital Matching event held today in Cape Town, they are bringing together more than 80 SMEs in the Tourism & Manufacturing, Agriculture & Agri Processing, Green Economy, Real Estate, Service and Technology sectors. The high-growth, ready to scale SMEs have the opportunity to meet with some of South Africa’s leading funders in speed pitching sessions, offering an overview of their business growth prospects.
An estimate by the International Finance Corporation reveals the significant impact of the local SME sector on South Africa's economy, contributing approximately 34% to the annual GDP and employing between 50 and 60% of the total workforce. Despite their vital role, over 70% of small businesses face challenges that lead to failure within the first five years. These challenges include a lack of access to tools and technology, skills deficits, difficulties in market access, and a pervasive lack of funding.
“Our G4J Strategy sets an ambitious target of building a trillion-rand jobs-rich, inclusive, sustainable, diverse, and resilient provincial economy, growing at between 4 and 6 percent per year in real terms by 2035. At the core of this bold plan is the understanding that the private sector creates jobs, while the role of the WCG is to enable this by making it as easy as possible to do business in the province. We are very proud of our collaboration with the JSE, it’s a prime example of this ethos in practice. It serves as a powerful demonstration of what can be achieved through public-private partnerships in support of scaling up SMME’s in the Western Cape,” says Mireille Wenger, Western Cape Government Minister of Finance and Economic Development and Tourism.
Today’s event is the culmination of a 5 -month process, with SMEs based in the Western Cape being called on to apply against specific criteria to join the programme. The SMEs chosen to pitch their businesses to funders went through rigorous capital readiness workshops which equipped them with tools and knowledge that enabled them to develop compelling investment cases for their businesses to present to the funders they are pitching to today. The capital matching solutions offered by participating funders include debt solutions, equity solutions (Angel and Venture Capital), Enterprise Supply Development, and grant funding.
“This inaugural event represents a significant collaboration between government, business and capital funders to positively and proactively promote economic growth through impactful solutions that sustainably grow and scale SMEs. By addressing the funding challenges faced by SMEs, we are contributing to the overall resilience and prosperity of these businesses, which in turn will contribute to employment and the tax bases in South Africa ,” says Vuyo Lee, Director Marketing and Corporate Affairs at the JSE.
The funders that will be engaging with these SMEs include African Bank, ABSA, Nedbank, the National Empowerment Fund (NEF), the Small Enterprise Finance Agency (SEFA), Small Enterprise Development Agency (SEDA), Esquared, Creative GrowthCap, Equate Group, Business Partners, Sourcefin, EdgeGrowth, AltVest, DEDAT and JSE Private Placements (JPP). JSE Private Placements is a different form of capital raising that enables unlisted companies to raise equity, debt or alternative funding through pre-selected investors and institutions rather than going the traditional route of raising capital on a public market like a stock exchange.
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The Johannesburg Stock Exchange (JSE) has a well-established history of operating as a marketplace for trading financial products. It is a pioneering, globally-connected exchange group that enables inclusive economic growth through trusted, world-class, socially responsible products, and services for the investor of the future. It offers secure and efficient primary and secondary capital markets across a diverse range of securities, spanning equities, derivatives, and debt markets. It prides itself on being the market of choice for local and international investors looking to gain exposure to leading capital markets on the African continent. The JSE is currently ranked in the Top 20 largest stock exchanges in the world by market capitalisation, and is the largest stock exchange in Africa, having been in operation for 135 years.
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