Business Partners reported yesterday at a round table held by the company, that it had approved R1 082.6 million in SME financing for the year ending March 2014, a 21.4% increase from the R891.7 million approved from the year-earlier period .
Nazeem Martin, MD of Business Partners Limited, said the results were “the business’ best achievements in the last five years” and showed the resilience of South Africa’s SME sector.
The specialist risk finance company which provides assistance to formal SMEs declared that a total of 386 investments were approved, a 16.6% increase from the previous financial year.
Martin said while the number of applications the company received had decreased, the percentage of approved applications had gone up. Martin said they attributed the changes to an improvement in the company’s marketing message, “people know exactly what we are looking for, so the chances of success are higher” he said.
Of the total 313 investments amounting to R864.7 million disbursed to SMEs during the 2013/2014 financial year, 102 investments to the value of R196.2 million were paid out to black entrepreneurs, while 135 investments amounting to R313.7 million were paid out to female entrepreneurs.
57 investments, amounting to R199.2 million, were disbursed in the financial intermediation: real estate sector (financing the buying of property by SMEs for their operations or investment purposes) followed by the manufacturing (food, textiles, wood and chemicals) sector, with 42 approved investments amounting to R126.4 million.
The company also reported a total income of R470.1 million, up 9.7% from the previous financial year, which the company said was largely attributed to the steady growth in its assets.
Martin said the company had moved to reduce its heavy reliance on loan interest as a source of revenue, with the company making an effort to focus on other forms of income including rentals and royalty fees.
Boosting the company’s results was the establishment of two new funds: The Franchise Fund, launched earlier this year, is aimed at young previously disadvantaged entrepreneurs, with limited assets and access to capital, to qualify as franchisees. As at the end of March 2014, six deals to the value of R6.9 million were approved. Launched in October 2012, the Venture Fund, which provides capital to SMEs for early-stage, high potential and high growth companies, approved six deals amounting to the value of R30.3 million.
Martin says the company remains cautiously optimistic with R1,13 billion earmarked for SME financing during the 2014/2015 financial year.