The efficient use of digital platforms is crucial in enabling convenient access to funding for South Africa’s small and medium enterprises (SMEs). This is according to Mike Vacy-Lyle, CEO of FNB Business, who says a pragmatic approach that prioritises the use of technology could be a game-changer in the way the country’s SMEs access funding opportunities.
“We are seeing evidence of this in our business since we introduced online credit scoring for SMEs that bank with us. The automation of this process has significantly improved our credit scoring rate in the SME space, which means qualifying small business that bank with us are able to process their credit applications much faster and get a quick response on the outcome of their applications,” he says.
Convenient access to credit is viewed as one of the fundamental barriers to growing South Africa’s SME sector; this is a sector that remains central to the government’s plans to stimulate a new growth path that is detailed in the National Development Plan (NDP). Unfortunately South Africa’s economic plight hasn’t been conducive to creating a booming SME sector, hence new interventions are necessary.
“The upliftment of SMEs is a non-negotiable for South Africa,” says Vacy-Lyle, “because of the urgent need to grow our economy, create jobs and broaden financial inclusion. While credit extension is an important component of enabling small businesses, we firmly believe that building an enabling ecosystem will significantly aid the process and the adoption of technology is at the heart of this process.”
FNB says according to its business registration data, approximately 3 000 new businesses registrations were initiated every month for the 12 months ending June 2017. The sustained business appetite among local entrepreneurs is good news for South Africa in the context of a stagnant economy which hasn’t offered much inspiration to both small and business activity.
“Globally, operating conditions are not getting easier for entrepreneurs; this is why innovation is necessary for business success. As South Africa’s top business bank, we are investing time and money to help entrepreneurs by understanding their core business and removing angst through our advanced banking infrastructure and tech ecosystem,” concludes Vacy-Lyle.