‘Business does not agree with every aspect of the
NDP, as is the case with other sectors of society.
However, we support the NDP as the only plan that
has buy-in from a broad spectrum of stakeholders,
more so than any other plan on the agenda.’
There are differences of opinion on whether the small businesses
or large corporations will create the largest pool of jobs. Research by
Finscope has shown that 90% of the jobs created between 1998 and 2008
came from small and medium-sized firms. But union federation Cosatu
has cited a study which has showed that large firms have a higher rate of
net job creation than small firms.
Ramaphosa told the summit that the NDP had identified an
‘important role for small businesses in growing the economy, and
contributing to the creation of 11 million jobs between now and
2030,’ and said that the NDP banked on the banking industry to
develop small businesses.
‘There are a number of areas where the private sector, and
specifically the financial services sector, needs to play a meaningful
role. They need to do so not merely as responsible corporate citizens
but because it is the right thing to do and that social progress is
critical to the success and sustainability of their business activities,’
Ramaphosa said.
He said South African banks had a “massive pool” of personnel
commanding advanced financial and business acumen.
‘It would not cost much, nor require great effort, to deploy some
of these capabilities to mentor small business owners,’ the ANC
Deputy President said.
He said one area that remained a challenge to SMEs was access
to finance, and that banks needed to investigate feasible ways to
extend credit to small businesses.
Ramaphosa called on banks to collaborate with government in
creating financial instruments aimed at assisting small businesses.
This included cooperating on building risk-sharing agreements
that would assist in funding small businesses.
He also added that with the international regulatory framework
seeking to manage the risk in the financial services sector, there was an
aversion by banks “to certain types of risk”.
‘This is understandable and prudent. However, banks need
to find mechanisms to ensure that finance for small business
development does not dry up,’ Ramaphosa said.
He told the summit that there was a need for the expansion of
angel funding – capital provided by high-net-worth individuals –
and seed capital.
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