OVERVIEW Development
OVERVIEW Development finance and SMME support Access to funding is being prioritised. Small-business owners chosen to attend a Capital Matching event in 2023 had to put in some sweat equity before they could get in the room with potential funders. A collaboration between the Western Cape Department of Economic Development and Tourism (DEDAT) and the JSE aims to improve access to capital for SMMEs over a three-year period. The 2023 event was five months in the making, with business owners having to meet certain qualifying criteria before being expected to attend “rigorous capital-readiness workshops”. More than 80 SMEs were then exposed to funders such as African Bank, ABSA, Nedbank, the National Empowerment Fund (NEF), Small Enterprise Development Agency (SEDA), Esquared, Creative GrowthCap, Business Partners, Sourcefin, EdgeGrowth, AltVest, DEDAT and JSE Private Placements. These funding institutions offered products ranging from debt solutions, equity solutions (angel and venture capital), enterprise supply development (ESD) and grant funding. Another DEDAT initiative saw 1 000 students selected for training in Business Process Outsourcing, a sector which created about 10 000 new jobs in the year to March 2023. The “Day of 1 000 Opportunities”, pictured, attracted many young people to Athlone Stadium in August 2023 and was an illustration of the provincial government’s “Growth for Jobs” strategy. Among the initiative’s other partners were CapeBPO, the Jobs Fund through the National Treasury, the College of Cape Town, the BPO Skills Academy, Futur-Ed and the City of Cape Town. Futur-Ed is a support structure consisting of a blended e-learning model for youth who excel at STEM subjects at school. The Business Hub is a City of Cape Town initiative that gives advice to entrepreneurs. In the first six months of 2022, 973 entrepreneurs participated in skills training offered by the Hub. The Hub partners with Productivity SA and the South African Renewable Energy Incubator in promoting SMMEs. Access to the Hub is free via Smart Cape Services at libraries in the city or where ONLINE RESOURCES Cape BPO: www.capebpo.org.za SA SME Fund: sasmefund.co.za Small Enterprise Development Agency: www.seda.co.za Small Enterprise Finance Agency: www.sefa.org.za SECTOR INSIGHT College of Cape Town offers training in BPO skills. free Wi-Fi is provided in all city-run buildings. Two of the Western Cape’s universities, Stellenbosch and Cape Town, are among the first collaborators with the University Technology Fund (UTF) which aims to commercialise innovations and inventions coming out of tertiary institutions. The UTF has financial clout as it is a part of the South African SME Fund, an offshoot of the CEO Initiative which brought together 50 major corporations, the Public Investment Corporation, the Unemployment Insurance Fund and the Compensation Fund. Among the businesses receiving support from the SA SME Fund is Hyrax, a company which emerged from research done at the University of the Western Cape into which HIVpositive people were resistant to certain drugs. ■ WESTERN CAPE BUSINESS 2024 42 PHOTO: Futur-Ed
Banking and financial services Acquisitions accelerate in the financial sector. OVERVIEW SECTOR INSIGHT Assupol will delist from the CTSE. The purchase by Sanlam of Assupol means that the smaller company’s ordinary shares will be delisted from the Cape Town Stock Exchange, pictured, left. Cape Town-based Sanlam, South Africa’s biggest insurer, paid R6.5-billion for Assupol, which started life as a burial society for the South African police and continues to have a strong presence in the country’s northern provinces although it now offers life insurance and other financial products. Sanlam, established in 1918 as a life insurer, is now a financial services company with five main divisions, including Corporate, Personal Finance and Emerging Markets. Santam focusses on shortterm insurance. With its headquarters in Bellville, Sanlam is Africa’s largest insurance company. Sanlam Investments has launched a Sustainable Infrastructure Fund which primarily invests in senior or subordinated debt across a wide range of South African infrastructure assets, with the ability to invest up to 10% in equity. Another large financial services group, Alexforbes, which has more than R450-billion in assets under management, acquired 100% of OUTvest in 2023. OUTsurance has decided to concentrate on its shortterm insurance business while the addition of OUTvest to Alexforbes’ portfolio gives that group enhanced digital capability. The Western Cape’s evolution into a technology hub is one of the reasons why one of South Africa’s newest stock exchanges chose to move to the Cape and rebrand as Cape Town Stock Exchange. This trend is also persuading banks, insurance providers, asset managers and venture capitalists to choose to relocate. There are more than 40 000 jobs in the technology sector (more than double ONLINE RESOURCES Financial Sector Conduct Authority: www.fsca.co.za Insurance Institute of South Africa: www.iisa.co.za South African Institute of Chartered Accountants: www.saica.co.za the total of Nairobi and Lagos combined, Wesgro) and formal employment in the financial sector exceeds 50 000. Together with business services, the financial sector comprises the biggest contributor to the provincial economy. According to Wesgro, 75% of the venture capital deals that happen in South Africa originate in the Western Cape. Most financial firms based in Cape Town have a long history, some going back as far as 1845 when Old Mutual started. One of the most successful disruptors in recent times has been Stellenbosch-based Capitec Bank. The head offices of financial firms are dotted all over Cape Town. These include Old Mutual and Foord (Pinelands), Futuregrowth and Coronation (Newlands), Prudential (Claremont), Sygnia (Green Point), Sanlam (Bellville) and Allan Gray (Waterfront). PSG has its headquarters in Stellenbosch and is well represented in rural towns. Insurers such as Santam and Metropolitan Life are based in Bellville. Nomura, a Japanese financial holding company, has a presence in the Cape through Nomura South Africa which offers investment banking services. ■ PHOTO: John Young 43 WESTERN CAPE BUSINESS 2024
