With many entrepreneurs listing access to funding as one of their biggest challenges, the launch of Finfind, an online tool that helps business owners access funding from the private sector and the government in 2015, was one of the biggest initiatives in recent years to help local entrepreneurs achieve this.
The platform, founded by Darlene Menzies and launched together with the Department of Small Business Development, the Small Enterprise Development Agency (Seda) and USAID answers the issue of accessibility by not only bringing entrepreneurs together with both government and private sectors funders, but also offering tools to help business owners get finance ready.
At the time of launch, Menzies said the platform answers the biggest funding challenges that entrepreneurs are faced with. “One of the main reasons why SMME owners struggle to obtain finance is because they are not considered ‘finance ready’ by large banking institutions. Secondly, no single solution presently exists that assists a business owner to explore all the finance options available to them,” says Menzies.
Six month since its launch, the team and their partners are happy with the progress, says Menzies. The numbers are promising, she says. They have already reached a milestone of 3 000 finance-ready leads and over 18 000 visits with the average time spent on the site per visit being just over 6.5 minutes
“Which is exceptional, anything over two minutes is typically considered outstanding,” says Menzies.
We look at the profile of users and how entrepreneurs are making use of the platform
Top 5 financing needs
These were the highest ranking reasons users say they need funding.
1. Starting a business
2. Buying equipment
3. To expand
4. Growing my startup
5. Working capital
A breakdown of the loan sizes shows that the majority of entrepreneurs on Finfind are looking for loans of less than R1 million. Twenty-one percent of business owners seek loans of between R1 million and R5 million with only 11% looking for loans of more than R5 million.
Age of business: Most of the businesses are in the startup phase i.e less than three years, with the majority of these businesses having being operational for one year.
Average Annual Turnover: The majority of registered users are owners of micro and small businesses with 77% earning less than R1 million in annual turnover, 17% have an annual turnover of between R1 million and R5 million. The number of users with an average annual turnover of over R5 million are 4%, with 2% earning a turnover of over R10 million, qualifying as medium enterprises.
Profitability – The majority of the businesses surveyed (63%) say they are profitable, with the remaining 37% reporting they are not profitable.
Employee sizes – 43% of businesses employ between two and five employees, this is followed by 41% of businesses with only one employee. Only 8% of businesses employ between six and 10 employees. The percentage of businesses that employ over 10 people is also 8%.
Top 5 business sectors
1. Food and beverage
2. Information and Communication Technology (ICT)
3. Business Services
Entrepreneurs under the age of 35 years make up the majority of visitors at 56%. The over 35 years segment makes up 44% of total visitors. With an equal split between men and women.
The number of users that have registered for or used the platform since the launch = 12 510
Number of total visitors = 18 954
The number of private sector financiers that have signed up so far = 130 lenders with over 350 lending products.
The Gauteng province leads in the number of users on the site. This was expected, says Menzies, who attributes this to the platform’s launch in the province in 2015. She adds that they expect the other provinces to catch up as they will be starting with nine provincial launches together with Seda from this month.
Western Cape: 15.2%
Kwa Zulu Natal: 14.8%
Eastern Cape: 1.8%
Free State: 1.7%
North West: 0.6%
Northern Cape: 0.3%
A learning process
The first six months have been both a learning and assessment period of the system’s performance says Menzies. “This has been the primary purpose of the initial six months of the system, to ensure ease of use and to ensure we have covered the majority of lenders’ needs,” she says.
She says that user feedback has helped them to prioritise the product’s ongoing development roadmap, she adds hinting that the next phase of the system development is to facilitate the online integration of Finfind with lenders in order to enable loan applications for finance ready SMMEs to be processed directly from the system.
“We are currently working with a number of lenders who are part of this pilot, this compelling feature will be made available to the public in the near future.”