2 days ago
Retail giants step in with millions of rands to help entrepreneurs on their way up
South Africa's small businesses shoulder a heavy load, employing about 13.4 million people, and more than 70% of them don't make it past the seven-year mark.
This week, Woolworths and Mr Price joined the growing queue of corporates trying to fix that, pledging millions towards entrepreneurship and empowerment.
The business of doing good
Woolworths is framing its new Inclusive Justice Institute as a practical demonstration of corporate empowerment, with the minister of small business development, Stella Ndabeni-Abrahams, endorsing it as a model for retail-led development.
Backed by R300-million in funding — R200-million from Woolworths and R100-million from the Land Bank for emerging farmers — the institute will operate through two non-profit arms.
One focuses on developing suppliers and the other on community programmes like food security and education.
The retailer says it increased its procurement from SMMEs by 42% to R4-billion last year, and donated R816-million worth of surplus food to under-resourced communities.
Woolworths' corporate social justice director, Zinzi Mgolodela, said: 'Our support for MSMEs [micro, small and medium enterprises] has helped stimulate economic growth by empowering beneficiaries to create jobs and expand their businesses.
'Through our NGO partnerships, we support rural and semi-urban communities to grow food and become self-sufficient, and our education initiatives have improved learning in under-resourced schools and promoted child safety, giving children the opportunity to thrive in safe, supportive environments.'
The Land Bank's CEO, Themba Rikhotso, said: 'This initiative aligns directly with Land Bank's mission of empowering previously disadvantaged communities and to increase the inclusion of emerging farmers in the commercial agricultural sector, thereby enhancing the country's long-term food security.'
Fishing for hustlers under 35
Meanwhile, Mr Price's Bindzu Youth Fund offers black and youth-owned businesses the chance to apply for R3-million in grant funding, spread across bootcamp training, mentorship and seed capital.
The retailer's efforts seem to be focused on the right goal. Data from FinScope indicate that 30% of SMME owners are under the age of 35.
To qualify, applicants must have been operating for at least 12 months, be between the ages of 18 and 34, and earn less than R5-million in annual turnover. The foundation says the goal is to help young entrepreneurs cross the resource chasm, which kills most early startups.
'The country has no shortage of young minds with bright ideas and business know-how,' said the foundation. 'So, although training and mentorship have been foundational to the success of young entrepreneurs, a greater need lies in real resources, and the willingness to release these resources to the youth.'
The closing date to apply to the Mr Price Foundation is 30 June.
Credit desert
According to the Tips State of Small Business in South Africa 2024 report, SMMEs secure considerably less external funding than large corporations.
They receive a paltry 13% of total bank credit. Corporations gobble up 51%, while regular consumer clients get 36%, which leaves small enterprises starved of working capital.
The Woolworths and Mr Price programmes signal that retailers are no longer content to just manage supply chains but want to manufacture credibility.
With government interventions slow and often mired in inefficiency, the private sector is positioning itself as both rescuer and reinforcer of South Africa's SMME ecosystem. DM
