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SMEs - SMEs and South African banks
| Guest post by: Dr. Rob Smorfitt |
Article Overview: South African banks are permanently between a rock and a hard place in the context of SME's.
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Free Download - SMEs – SMEs struggling in South Africa. Why? By Dr. Rob Smorfitt |
SMEs - SMEs and South African banks
South African banks are permanently between a rock and a hard place in the context of SME's.
On the one hand government expects them, as public companies to provide development capital, which is not their role, and on the other hand, the government has created the expectation that banks will / should finance all SME's.
Government on the other hand manages all it's development finance as though they were running a bank, using duplicate systems to the banks in deciding who to give loans to. So government does not do development capital properly, and banks do not do it but are expected to.
However, while South African banks are undoubtedly innovative in many ways, and world leaders in certain respects, they are decidedly lacking in innovation when assessing SME loan applications. However, I do not believe they are any worse than other banks elsewhere in the world. However, they could possibly all learn a thing or two from banks like Grameen and ICICI perhaps.
Rob Smorfitt
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Article Tags: Africa, bank, finance, SME, Smorfitt, South
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About the Author: Dr. Rob Smorfitt RSS for Dr. Rob's articles - Visit Dr. Rob's website Have an MBA and a PhD in entrepreneurship. Three key areas of ongoing research are entrepreneurship and innovation in large business strategy, the impact of legislation on SME development and SME finance. Run my own SME blog at http://sme-smb-smme.blogspot.com as well as an entrepreneurship and innovation for large businesses blog at http://innoveur.blogspot.com I have been self-employed since 1982. I have started or purchased in excess of 50 businesses since then. Most were sold again and a few were shut down because of a lack of profitability. Many were run by staff or family while I worked full time in my bigger businesses. Author of 6 books. Written articles for various magazines, newspapers and websites. Experienced in research within developing countries.
Click here to visit Dr. Rob's website  
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Related Forum Posts
Re: In-House or Outsource?
- Unfortunately, in the South African context, very few SMEs see outsourcing as an option. They believe it is too expensive, and they are paranoid that someone will "steal their ideas".
I believe that the three main functions that cannot be outsourced are marketing, sales and strategy. These must be done in house I believe. If you do not have the marketing skills then get them. Hire a consultant or attend a course, but get the skills. Even if you use a consultant, you need to understand what marketing is about, as no one knows your market like you do. Marketing is made to seem difficult and complex, but everyone who really understands their markets, can easily learn to do their own marketing.
In South Africa, labour legislation is extremely inflexibile, and consequently labour broking is a large industry. This is an ideal starting point for SMEs in South Africa, as it is a legally complex area, whih comes with severe penalties.
I say do it!
Rob Smorfitt
Re: How will an african make money truely on the net?
- [quote="MichelleJ":2a9hm5bq]Hi Topeyinka
I am just wondering, with Paypal as long as they can get your credit card verification
I don't think that they worry if you are an African or not. I also live in South Africa and
there was no problem getting verified with them once they had checked my credit card
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Michellej[/quote:2a9hm5bq]
Hi Michelle,
You can use paypal to send money and buy as a South African, but you are limited to receive payment. So what is the use of spending money without making it. You cannot accept payment with your paypal.
Any way South Africans can make use of 2CO to recieve payment on theie websites.
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Welcome to the forum. Which part of Africa are you from it is quite a big continent? I live in South Africa.
MichelleJ[/quote:1mn7d7fx]Hello MichelleJ,Nice to hear from you.I live in Nigeria.I am also trying to reach the South African market because I know You guys have a lot of unique stuff to show the world!
Re: Hello from South Africa
- Thanks Topeyinka
Nice to see yet another South African here!
Cheers for now
Cyn
[quote="topeyinka":3dokkoo1][quote="CynthiaMinnaar":3dokkoo1]Hi Everyone
My name is Cynthia Minnaar and I run my own online business full-time from my home in Pietermaritzburg, South Africa.
Although I have been submitting articles to Evan Carmichael for quite a while now, it has taken me far too long to finally join the forum! However, I am pleased to finally be here and look forward to learning and contributing.
Great to see familiar faces in the Moderator panel - Hi Carol, David & GT.
Cheers for now
Cyn[/quote:3dokkoo1]
Hi Cyn,
You welcome to the forum. You will always find this forum educative and interactive.
I am also in South Africa, I stay in Pretoria.
You are in the right forum for a new life lift.
Cheers![/quote:3dokkoo1]
Best banks for business loans?
- Just as there are "chain banks" -- like Suntrust, where I bank here in VA, and which has at leat five banks here in the Tidewater area alone -- there are "stand alone banks." (Don't know if that's the proper technical term!) Banks that are small and have only one location or two at the most in any big city. "Local" banks rather than "national" banks, I guess.
I would trust a national bank more than a local bank... I'd assume the smaller banks would be able to go bankrupt easier.
(Although considering what has happened to Bear Stearns, who knows where the "little guy" can put there money and have it be safe!)
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