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Funding alone won’t necessary improve the success rate of small businesses, says Christo Botes, executive director at risk finance company for formal SMEs in South Africa  Business Partners Limited, in reaction to the government’s commitment to establish a R1 billion fund for small business and innovation.

He said in a media statement it is positive to see commitment from Government on another initiative encouraging innovation amongst small businesses. It would however be much more cost effective – from a national rollout perspective – to combine this funding with the CEO Fund, as pooling this would assist in ensuring effective management by the private sector. We would like to see the implementation matched with the intent to target deserving beneficiaries and accurately allocate the funding to start and expand sustainable small businesses.

“To purely provide entrepreneurs with start-up funding, without it being supplemented with technical skills and business acumen, can be counterproductive as research shows that funding alone won’t necessary improve the success rate of small businesses.”

He said Business Partners Limited would like to see a balance between the money borrowed from the fund by small businesses and sustainability measures.

Having just launched a R50 million (US$ 4 million) Technical Assistance Programme for Small and Medium Enterprises (SMEs) in South Africa with the support of the Swiss State Secretariat for Economic Affairs (SECO), Business Partners Limited also aim to improve the business, labour and environmental performance of SMEs.

Speaking at the launch on Wednesday, Ben Bierman, MD of Business Partners Limited said: “In the 36 years of our existence, we have learned that providing SMEs with finance alone is not enough; the sustainability and prosperity of businesses increases significantly when the finance they receive is coupled with well-planned, well-executed and accurate technical assistance.”

H.E. Helene Budliger Artieda, Ambassador of Switzerland to South Africa, said that a thriving SME sector is what these two countries have in common. “Although Switzerland is known abroad for some of its big companies, but 99% of its companies are SMEs and these provide 66% of Swiss jobs. It is clear that South Africans have an incredible entrepreneurship spirit waiting to be unleashed, and we look forward to contribute to it and to the collaboration with BUSINESS/PARTNERS, whose expertise and experience with similar projects will be key contributors for the success of the Programme.”