Old Mutual
Old Mutual
The importance of access to funding for SMEs
SMEs are engines of innovation, job creation & economic growth, yet they have challenges accessing funding. Join Audery Masango & Nobesuthu Ndlovu, Director of SME at Old Mutual address the challenges SMEs face with access to funding and more.
Speaker 2: 0:18
H7O2 Education. One of the things that arose out of that conversation was that you know, we've got to really strengthen the entrepreneur. We've got to strengthen the capabilities of the entrepreneur beyond issues such as access to market and funding. But some people might have understood us to be thinking that we think funding is not that important, and that's why we've got you here, because funding is important. I would imagine Nobisuto in the journey of an SME or an entrepreneur.
Speaker 1: 0:52
Yes, absolutely. I mean, funding is really, and maybe let's unpack funding right, because funding can come in the form of a financial services provider, or it can be friends or family, but whatever the format, it is the enabler for growth of your business. You need money to make money.
Speaker 2: 1:11
Friends, family, or fools eh.
Speaker 1: 1:14
I didn't want to say that last one, because let's not call them fools, let's call them the believers.
Speaker 2: 1:20
Yes, yes, yes, let's call them the believers.
Speaker 1: 1:37
Yes. So funding for a business essentially represents what. What does that mean? Does that mean you're just giving the entrepreneur, the business, money? What does it mean? And practical perspective, it represents growth, aubrey, because I could be funding to increase my stock, I could be funding to enable working capital for that stock, or I could be adding on, if I'm a retailer, additional stores, and I think what's really helpful that we've seen is when the business owner is super clear around what it is that they need the funding for, because funding actually is a means to an end, it's not the end in and of itself. And so for me, it's really about that level of clarity of what am I going to use these funds for and what are the outcomes that I expect on the other side, so that I'm super clear with my funders, because if it's working capital for growing my business because I need my daily operations, that is a different outcome to I am buying a new asset because there's a very specific return investment in that regard.
Speaker 2: 2:40
So you're not necessarily wanting to hear, and again I'm going back to the whole issue of clarity. By the way, is there a way that we can make Nobesuthu sound a little clearer? Sorry, Nobesuthu, it sounds like you're very far from me. I can hear you, but it sounds like Nobesuthu is a little bit far. My guest is Nobesuthu Ndlovu. She's director of SME at Old Mutual Limited. We talk about funding and that issue of clarity is coming back again, that issue of clarity as to exactly what is the reason for your need of the funding. Now a lot of us are going to say, oh, I don't have money, give me money. She's back again. Nobesuthu is back again. The issue of clarity was touched upon In the previous conversation About the characteristics of an entrepreneur. That you've got to be clear. You've got to be crystal clear there must be no ambiguity about it what it is that you are trying to do, why you need the funding. What do you mean by clarity?
Speaker 1: 3:43
Nobesuthu, sure, so it's really having a very detailed view. You need the funding. What do you mean by clarity? Sure, so it's really having a very detailed view of the application, of what that money will be used for and the expectations on the other side of the outcome of using that money, because I think I could tell end of your conversation.
Speaker 1: 4:01
But really we are backing not only the business in and of itself, but we're also backing the jockey behind the business and so if the person that is representing the business articulates themselves in a way that makes us feel, as financial service providers, that you know what. I think this person knows what they're doing and they've got a good handle in terms of what they're doing and they're coming across as clear in their strategy and their associated outcomes of what this funding will do. That's essentially quite critical from a clarity point of view.
Speaker 2: 4:34
So, you want us to speak English?
Speaker 1: 4:39
All of your data bundles, all of the ones that are available to you, but more than English, it's really how are you going to make this money? Make money, and from a larger and bigger picture perspective, is what is your impact from a job perspective and or sustainability of your business? That's what we really want to see, because we're in the business of impact, large scale, as well as a financial service provider.
Speaker 2: 5:08
I'm being a bit facetious, but deliberately so, Nobesuthu, by sort of playing on the idea that so you want us to speak English. I'm understanding you to be saying that I don't care what language you speak, as in the grammar that you use, but I'm asking you to be able to express to me that you understand what you are in for and how you're going to make it. Do it, whether you do it in Russian or whatever the language you choose to use.
Speaker 1: 5:40
We want to understand that you understand what it is that you're doing, right 100%, and it actually just leads me to what we have discovered from an old mutual, specifically our digital platform called SMEgo, which is a platform where there is close to 50 funders which we are exposing our businesses to when they apply.
Speaker 1: 6:07
The reality is that, as a business owner, I don't really have time to figure out the different types of funding products that are out there, right? I just know that I need money and I need it for a particular cause and I need it quite quickly. So, from a journey perspective, and how we've solved for it on SME Pro is really to simplify the questions that are associated with what you need funding for and almost make it a little bit more practical for the business owner to give examples of what they're typically using the money for, because, to your point, from an English perspective, we just want you to know what it is that you're going to be using that money for and have that level of charity. Everything else that comes with it and the technicalities that come with funding are really not something that we want the business owner to be too concerned about we want the business owner to be too concerned about.
Speaker 2: 7:08
The reason why I also ask that question is because most entrepreneurs, at least in our context, Nobesuthu, are people that might not necessarily have had the benefit of higher education or any education at all, had the benefit of higher education or any education at all. But some of them are people that are really, really capable and have acumen. But it usually starts in very elementary terms. I always make the example of Labokoko as you go to Venda. What is that market called? Again, Chris.
Speaker 1: 7:47
Chakuma.
Speaker 2: 7:48
Chakuma Market.
Speaker 2: 7:52
As you go to Venda, they are selling fruits and vegetables and they've created empires right. But these are not necessarily the people that are going to be able to articulate, in business terms that we understand to be business terms, their vision, and those are the people who are the kinds of entrepreneurs we need more of. The guy who is a great panel beater and he now wants to really professionalize his operation and he needs funding to expand. Right, as you said, that it's really not so much about it being the end, it is a means to an end. How does a person like that communicate to you as a possible funder at a big organization such as old mutual? I've been to your building. It's a pretty intimidating, but how, how do I speak to you? If I'm that person and I need funding for a genuine expansion of my business or the starting of the business, how do I even even start.
Speaker 1: 9:04
I like that question because it actually speaks to the responsibility that we have as financial service providers, right, and what we've typically done in the past and I've worked in a few banking institutions, is we expect the customer to respond and apply themselves in the way that suits us as a financial person.
Speaker 1: 9:29
When actually we and that's the approach that we've taken. So, I mean just a quick trivia I've run my own businesses, run my personal capacity, so what we've built at Open Mutual is really coming from that lens, from an entrepreneur's perspective. An entrepreneur doesn't have time, whether they are from Harangua or they're from the suburbs of wherever in Joburg, it doesn't make a difference, right? And I think the second challenge that we also have done, and sadly in the South African context, is we've classified according to demographic right, which, in my opinion, is a slightly flawed approach. And so when you're asking me, what does the entrepreneur do?
Speaker 1: 10:13
And I'm almost saying that what we've had to do as a financial institution is to think of things differently, right? So everyone is using digital right. As I'm running my business, if I'm a construction owner or I'm a panel beater, I'm on the goal, right? I'm not actually sitting behind a desk and I'm not going to go to a branch because I simply do not have that time. So, I think the first and most important aspect and I'm actually flipping a question on purpose, right is that we've had to say to ourselves where do we want to find, or where do we find business owners? Right, they're in their business.
Speaker 1: 10:49
They don't have time to come to us, so let's give them a platform that is digital. That's where F&E Call comes in.
Speaker 1: 10:55
So for us, we said to ourselves we're going to provide a solution that is available on iOS, or it's available on Android and or it's available on the web and you should be able to apply for funding as you are in transit, right, and you shouldn't have to have the data the English data bundle to figure out what type of funding it is that you need, because we've got a very simple procedure in terms of almost three to five questions that ask you specific points around your business and then that comes through to ourselves. So, with peer, you don't have the time to figure it out and you don't have the time to be sitting in front of a desk to actually make that funding.
Speaker 2: 11:38
But I care about the responsibility of the business owner to the extent that which is currently being made, yeah, but I'm sure you appreciate the fact that, as an entrepreneur, of whatever sort of level, I also want to express to you the person that I'm asking for funding for my passion. Yes, the nuances of the value proposition that I'm bringing as an application to you Does this system, this Android computer, I don't know, sme Go.
Speaker 2: 12:16
SMEgo system. Does it allow for me to say Nobesuthu, to look into my eyes, look at me, look at what I'm saying to you. Yeah, because my sense is that a great opportunity for the development of entrepreneurship in this country is lost by precisely what you said when you started to answer that question that we need to meet the entrepreneur where the entrepreneur is. Because we appreciate that we need more entrepreneurs. Yes, but I sometimes get the sense that those who fund are developing questions for the corporate, for the organization, for the bank, for not so much to unearth the entrepreneur, and you've answered that by saying no. No, we understand that. That is why we go to the entrepreneur where they are and we've provided the technology for.
Speaker 2: 13:21
But what about me wanting to meet Nobesuthu? I've got my panel beating company here, my business here, and I want you to come and see my operation. It's not glamorous but, man, it works. I've taken advantage of a certain number of situations in that I know that it might not necessarily be 100% legal, but I'm using my house and therefore I'm able to not necessarily be having to pay certain rentals and for that reason I want you to come and see my operation. Yes, it's not the most comfortable, but I'm doing the panel beating here. But now I need a factory, I need a warehouse somewhere, and I found it at this place. And to come and see the evolution of my thinking is there enough? Is this? Is there that? Can you afford the entrepreneur that?
Speaker 1: 14:23
I get what you're alluding to, which is give me that face time, yeah right, so that I can state my case, because I think I can present myself to you on the other side and probably sell my business better than a digital format would, which is a fair point. But I think where we're finding ourselves as a country is that there's an urgent need for SMEs to get funding at scale and, given that technology is available to everyone, regardless of where you are based in this country and your social standing right, so I almost want us to or rather, I'd like to invite you to a different way of what does seeing actually look like? Because what we would be looking for is how has your business been running over time? And something as simple as I can see your invoices right. I can see that you're invoicing Obree, you're invoicing Larrato, and your invoices have grown from three today to, in a month time, you've gone to 30 or 300.
Speaker 1: 15:44
That is a different way of us seeing your business and seeing you and seeing how your business is actually growing over time, which is a different way of then confirming for ourselves that, okay, this business is actually on the right track because it's got traction and we can see the frequency of transactions.
Speaker 1: 16:04
And you know I'm going to circle back to the point that the scene is enabled through technology and that's what SMEgo actually enables. And you know, for us we're quite passionate about the fact that it's a virtual cycle. For you to get funding, you need to have a business that is a good going concern and if it's a startup, you need to be able to present it well. The startup one is very hard, I'm not going to lie, and I think that's an important aspect for most people to understand. Right At startup I mean a spreadsheet, whereas a business that has been running and it's got some sort of a trading history via the bank account, via your invoices that you've created on our platform, preferably, which is SMEgo, then we're able to see you and see that, okay, your business is viable and therefore we can fund it. So it's a different way of seeing through technology.
Speaker 2: 16:58
So, I imagine then, Nobesuthu, before I take some calls calls starting to come through and some messages on our WhatsApp line is that yours is catering for a particular business person at a particular phase of the evolution of a business.
Speaker 1: 17:16
Correct, correct, yes.
Speaker 2: 17:20
Because I imagine that there are people out there who provide funding for startups and they'd be properly geared for that space. But what I'm understanding from you is that you are the kind of funder, you're the kind of shall I call yourself a venture capitalist that will fund a business that is at a particular space, at a particular phase of the entrepreneurial journey.
Speaker 1: 17:47
That's from a funding perspective, and I definitely have to give a big disclaimer it's not a venture, because in the funding world that's a different term, but we provide funding through different funders on our platform.
Speaker 1: 17:59
We have different types of funding solutions and maybe just to expand right when I say that's just the one aspect, funding. The other aspect is our let's call it order to sales capabilities, where you are sending invoices, quotes to your customers, creating products, creating your customers. All of that technology management or business operations management we provide on our platform. So, let's say, you're at the starting phase of your business through the documents that I've just mentioned, your quotes, et cetera, so that you can then build that data point for us. By the time you then start and have the need for funding, we've already got your transacting history on the platform, and so then the funding journey becomes a lot easier because you're not beyond startups, You've got some transactions at least minimum six months and you're able to apply for funding and, of course, then the businesses that have already been ongoing. But a second aspect that's quite important to note is that there's so many different types of funding solutions, Aubrey, and personally I didn't know some of these funding solutions until I got into oh no, Mr. Tutu, I'm losing you.
Speaker 2: 19:18
If you could just move around a little bit, I'm losing you, okay can you hear me now? There you go, there you go.
Speaker 1: 19:23
Sorry about that. So, what I was just alluding to, around the different phases of funding, there's also different types of funding solutions. I mean something as simple as if you have a purchase order from an old mutual that says I'm willing to do business from Tabisa Incorporated Technology Services, you can take that purchase order too and give it to us on our platform and we would be able to, on the back of that purchase order, because an old mutual will be paying you, give you funding. I mean that's a game changer, right, because that means I don't have to worry too much about my history and or my trading, or rather how my balance sheet is looking.
Speaker 2: 20:05
Yes, so I suppose what I want to leave in the minds of my listeners is, firstly, that you've got to be fundable, so, in other words, you've got to be able to present a story that is going to be able to make the funder comfortable enough to unlock the funding. And that means that there are certain things then that you need to do before you can simply go and say I need money, and that is documentation and all of those kinds of things, a history and so forth. But what you're also saying is that there are different funders for different types of moments in the journey of entrepreneurship.
Speaker 3: 20:52
Correct.
Speaker 2: 21:07
And they are there. They are available, you see, because, as an entrepreneur myself, correct, in other words, that clarity issue that you started off by talking about what exactly do I need for what purpose, and that will give you a sense of where to go and search for funders. But the funders are there, if I understand you correctly.
Speaker 1: 21:30
They are from SMEgo is you don't have to go and research because we appreciate that you don't have the time to be researching funding types and funders and all the different requirements. That's not the core business of the business owner. Funding is, as I mentioned earlier, right, it's a means to an end. So, when you need funding, it cannot be a protracted process, which generally is the case. So there is no. Yeah, I guess my point around this is the research aspect. We can kill it on SME. Call it's sorted.
Speaker 2: 22:07
I have a few calls, but I want to read you a message from David Frank, who's just sent me a message right now. David says good evening, aubrey. I was listening while driving and I'm an entrepreneur. I've been in logistics for 30 years and I decided to start my own logistics business. However, when trying to get a warehouse, landlords are asking ridiculous deposits up to three times the amount, which is in excess of 860,000 rands. How do we, as SMEs, come up with that kind of deposit? Also, with regards to funding, we struggle to get to the correct person responsible to offer the funding as well as information required, which is sometimes beyond us. How do I get funding and who can I specifically speak to? And that is from okay, anonymous. Sorry, but it's the quintessential entrepreneurial question as far as funding is concerned. Please think about that. I want to take these two calls while you jot down some of their questions. Please, Nobesuthu, let's speak to Thabo in Menlo Hi Thabo.
Speaker 3: 23:16
Good evening and a guest? Yeah.
Speaker 2: 23:17
Good evening to you, Thabo.
Speaker 3: 23:19
I actually wanted to come in on the previous guest, but let me try to rephrase my question to be relevant to your guest right now. Actually, my question is motivated by what you have just said about Venda. Now, when you look during the time of the apartheid government, the apartheid government had a system I think the, during the day we were talking about it is B as a PD King black people's developmental operati or something like that. In Northwest it used to be called BNDC. Now those financial institutions were the ones that were actually enabling or targeting business acumen and entrepreneurship. Now I'm saying this because of the previous guest what you have just said about the vendor people we have VBS in vendor that was taking care of that whereby if you can talk to the people in vendor, they will tell you a lot of people were given funding through business achievement that they had the knowledge, the skills that they had to do funding and to sell the products that are coming from the button, from there, like, for instance, the, the one that they produce a lot, go govinda, the matinee, the one that they produce a lot, go governor and go avocado, avocados and so forth and so forth and they were given the support and they were even the creative. The chakuma was created so that they can sell, so they were given that uh money so that they can be, uh invested in the business acumen that they have the knowledge, the skills that they have.
Speaker 3: 25:21
Now, that which I'm finding difficult with the financial institutions that exist in the democratic dispensation is that actually, they are looking for entrepreneurs, but they're looking for business acumen. They're looking for people that have got knowledge to run the business and and knowledge to do this and that, and that the unfortunate part of it is that you can be an entrepreneur, like you are saying, those old men. They are not educated, but they can sell, they can plow, they can do this, they can enter the, they can do this, they can enter the market. They can be entrepreneurs without the education, alright. Now the question is the financial institution is not specifically for you, but the one that we have in South Africa. Are they actually looking into investing into or into the business acumen of entrepreneurs?
Speaker 2: 26:22
Thabo, thanks very much for your question, much appreciated. Dineko is in Johannesburg. Hi, Dineko. Very good, Very good. Thanks Dineko, Go ahead sir.
Speaker 3: 26:35
A belated one, and also greetings to the university. Yeah, yeah, let me just try to be brief, if I may. My pin here probably is red taps. Right, so many red taps. And then the second one is segregation, especially according to race. I think you know the story of that scandal from, wasn't it from? Wesbank. But I want to touch on the red tats.
Speaker 3: 27:06
Right, you'll find that you have something which is very good and you have put it on paper as a side and you make it bankable. It's commercial, viable, right, it's on paper. You are well articulated. You go there, they give you 10 minutes speech or whatever time or time limit it is, and you meet three, three people there and then you teach everything, right, and then it will come to this result. Okay, they'll agree or not, it's a very good idea. For me it's a very good idea. And but now, when it comes to the second requirement, they'll, they'll tell you about collateral, right, let's say then, collateral you do have. Then you say, next time I think that collateral, I can talk to my uncle or brie, he's going to put one, two, three, or you've been assuring me, and then they'll come again and then say, okay, they need to check the people who are involved in that IP, their credit score or their credit record, and 80% right, there was a report 80% of South Africans. They are on the negative, their credit scores are not fine, right, and that it is also, I mean, a deterrent. I mean they are already at a disadvantage.
Speaker 3: 28:19
So, the reason why I even touched on the thing was segregation. Right, as much as you are black and, let's be honest, much as you are black and you go the people in these private funders, as long as you are black, you need a very strong connection, somebody who is going to connect you to those decision makers within that corporate. And if you don't have, it is against you already. And if I can give you an example, example, go to a Jewish bank, as all this. I know other races, like white people. They do have their own establishment and most of you know they're owned by them. Just for the mere fact that you have and remember, and your color is already white, you are a certain advantage. If I didn't percentage, I mean it's already given to you. That's not a definite thing. You know this one is good, but just because it's me, dineko, and I'm black, and I'm coming with something which is viable, and I am well articulated and I'm done. You know they'll just give you a voice?
Speaker 2: 29:37
Have you actually done an application, Dineko, where that happened?
Speaker 3: 29:42
Oh yes, done an application to Dineko, where that happened. Oh yes, I'm done.
Speaker 2: 29:47
Give me a given example, example of what of the of what you're talking about is no, no of the fact that that that you, you, you had a particular application, and because you're black or because you couldn't well, because you have credit score, you know all of the things that you've done. Where did you apply?
Speaker 3: 30:09
Because I'm too busy with a lot of things so I'm not at liberty to mention their names. Okay, they might work against me.
Speaker 2: 30:15
Okay, All right, Dineko in Johannesburg. Thanks very much for your call. Much appreciated, Nobesuthu.
Speaker 1: 30:23
Thanks. I'm going to answer Tinuko's question and the first caller because I think they're sort of two in one, because it speaks to the theme of funders wanting funding or wanting collateral or some sort of guarantee up front before you actually get the funding. And I think to Tinuko's point. I get it and I resonate, having been a black female entrepreneur myself, where the headlines read we're looking for entrepreneurs that are black and female and one would apply and experience the challenge, which it may seem as if it is a race challenge, but the harsh reality is that typically what is required is a form of collateral that says if things don't work in your business as a financial service institution, we are able to get that money back through the collateral that is put on paper and the reality around why that exists is because financial services such as ourselves at Open Nature we have to pay that money back to the shareholder or the policyholder where we get that money from.
Speaker 1: 31:36
So I think there is a slight misconception in the entrepreneur's market and I personally have this misconception that that money is money that is coming from surplus funds.
Speaker 1: 31:47
It is money where the people that have given that money do expect a return.
Speaker 1: 32:00
But I've got good news right in that, if we do not have that collateral, we would have some sort of an initial trading history, and I'm going to go back to the point that I made earlier around why it's so important to digitize your business, and that's what we're offering on SMEgo, Because if we can see how you have been trading and back to the point of the different types of funding products that are available, then it's an easier case for us to fund you and it removes the race issue.
Speaker 1: 32:25
It removes the collateral issue, and the reality is that a lot of entrepreneurs don't know of solutions, such as ourselves as a cynical. We're new into the market and we're here to change the funding market because we know that the sentiment around being black and needing collateral is a real issue. But it can really be solved and we have solved it as a result of having different types of funding solutions. And I think this also speaks to a very important other point, Aubrey, that a lot of large corporates, such as ourselves at Open Shop, we want to do business with black business owners. It's a real thing, and so I think, when you are pitching for work, or rather to do work for a large corporate, as a large SME- please come out as a large SME, as an SME that is intending to be large.
Speaker 1: 33:18
Come onto our platform and give us the details that are associated to the purchase order that you would have received from the large corporate that you'll be doing business with, and I think you might be surprised Positively.
Speaker 2: 33:33
And what about my first listener who says listen, I'm being asked to start a logistics business. I've been in the business for 30 years but I've started my own business. Landlords are asking for up to 860K. How do I even start?
Speaker 1: 33:54
Yes. So that is speaking again to the point that I'm making now, that it's either collateral and or if you're applying, or rather if your business has been in existence, then it's slightly easier for you to get that 860k from us. But I'm not gonna lie, it is extremely difficult for us to give you funding on the back of a business that hasn't done even the first transaction. And so I'm saying now right, go back to the point of start small. You don't have to start big. So if the large business that you're working with wants some sort of a deposit that is quite large and you can't put that, take two steps back and get some runs on the board in terms of getting smaller clients.
Speaker 1: 34:44
Get your invoices on our system. Get your purchase orders on our system then, it's easy to come and ask us for funding on SME.
Speaker 2: 34:52
Go for them, so it appears to me that what is a big funding unlocker here is history 100%, all right. So if you can demonstrate however it is required by whichever funder a consistent history of doing business, the chances of you getting funding become greater than you not getting funding 100%, and that's exactly what we're solving for on SME Go the ability to capture. Yeah View asks is it SME Go or SME Gold?
Speaker 1: 35:42
SMEgo, smegoldcoza, or you can look on the app stores and look for Old Mutual SME Gold.
Speaker 2: 35:51
Tembi asks Good evening, If I have a purchase order and need funds to execute a project, can I be funded? And if yes, what documents are required from me and what is the turnaround time to be approved, says Tembi. And perhaps another one similar to that, just really more operational, says just a quick one what is the minimum annual turnover to qualify for funding? And that's from Tuso in Boxburg and I suppose those are more practical sort of questions for you there, Novesud.
Speaker 1: 36:26
Sure, so the minimum turnover is 500k and the documents that are required are your management accounts, your bank statement and the purchase order, and all of these you can upload on the platform on SMECO.
Speaker 2: 36:44
Nkolisi says unsubstantiated claims by TINECO should be rejected. No, I don't think so, nkolisi. I think that we need to accept the fact that how we experience something and how we then interpret that experience is a very real thing. It's very real. Then, interpret that experience is a very real thing, it's very real. We might actually have an opportunity here in the funding world where we actually solve for that perception. But again the VBS's, all of those government Funded Funders of black business back in the day. Have we got equivalents Thereof nowadays? Now, in South Africa Of 2024?
Speaker 1: 37:40
That I'll put that quite simply we do not have funding nowadays, now, in South Africa of 2024? That, no, I'll put that quite simply. We do not have funding that is necessarily race-based, but what we do have, and what I mean by that, is black only and not 100%, but we do have funds that are focused on your race plus demographic.
Speaker 2: 38:11
For example, we've got Imafisuzane, which is yeah. We've had Umakeba here on the show, yes, yeah yeah, yes.
Speaker 1: 38:17
So, that type of a fund that looks at race plus the type of sector that you're in is one of our funds that we have on SMEgo, which is an old mutual fund which I would highly encourage people to use. Another type of fund that is available that is based on demographic and if you're doing business with a large corporate is our ESD fund. Business with the large corporate is our ESD fund. So if you're doing business with Old Mutual and you are a black-owned business, then you can certainly apply for funding on our platform. So to a certain extent, it is available.
Speaker 1: 38:55
The reason I'm putting in a big and after the demographic is that it's associated with the type of business that you're doing, which is quite important. But also, most importantly, as mentioned earlier, it won't just be on the back of the fact that you're black and you've got the associated criteria, but do you have the trading history that we need? Is your business profitable or is it en route to profitability and can we work with it? So I do appreciate and I guess I want to overemphasize that I get it and I empathize, because I've been in that situation where I felt, as a black entrepreneur, it's so hard to get funding. The harsh reality is that I didn't know that there were funds such as the ESP fund, such as and that's really what we're trying to solve for an SME, so that the business owner doesn't have to figure these things out. They should be able to apply and we figure that part out for them.
Speaker 2: 39:54
So, what I'm hearing you say is that there is a recognition in the funding space of some of the challenges that come as a result of our very racially segregated history. They do exist. Yours, on the other hand, is not necessarily just about that. Of course, you want to encourage black businesses to be in business and you want to fund them, but it isn't just about black businesses. There are other criteria or let me say first, principle criteria that you would need for people to be compliant on. It's not just about the color of the person, and I that that understand that historical issue, the issue of the disadvantage that comes with being black in South Africa, and so forth. You're saying that there are businesses that are about that, but even in that situation, they would also want to know the viability of your business, and you'd need to be able to articulate that too 100 percent your business and you need to be able to articulate that too.
Speaker 1: 41:03
100% and those funders on our platform.
Speaker 2: 41:04
We have them, and that's specifically and the Old Mutual fund what I'm hoping that we can leave in the minds of our listeners is the idea that looking for funding is not an easy thing, because people are shall we say, people are potting with money here, right, because you know I'll make this example and I know that it might not go where it needs to go. But my son comes to me and says, dad, please give me a hundred bucks. And then I say why? Oh, because I'm your son and you love me. And I say, yeah, sure I do, but why must I give you money and how do I get my money back? And then he scratches his head as a funder I probably won't give him that money, but as a father I might give him that money and I and I suppose what you're saying to me is that you need to be able to tell me why I should give you the money in a way that makes sense to me as a funder, because I want that money back.
Speaker 1: 42:23
I'm not your father 100% and to build onto that Aubrey right, we want to be able to give that money to your other children. So when your business has succeeded and you have managed to pay or mutual back that money that they've lent you, we can then lend the next business of Old Mutual Junior and we can lend Lerato's business. So it's also about giving back, and I think that's an aspect that we don't really think through as entrepreneurs, or rather we don't think of it in that way like we see it, as I need the money so that I can build my business. But if your business succeeds which we are certainly wanting and that's our intention from an SME core perspective then it gives the opportunity for others to come after you.
Speaker 2: 43:22
Youth for Climate Change says these funding schemes just want to tell us that they are discriminating against the informal, non-established businesses. The fact is, many SMMEs can't obtain such funding because they're informal and don't keep proper records. We need funding for township businesses. Well, I would ask you then, youth for Climate Change, why don't we then create I mean, there's our opportunity Create platforms, create solvers of the problem that we don't have enough proper records. That's our opportunity. Isn't that an entrepreneurial opportunity? Nobesud.
Speaker 1: 44:02
Well, that's exactly what SMEgo does. It is a digital platform where entrepreneurs regardless of the stage in your business or the turnover from an invoicing, just capturing the business transaction history you can use the platform. You've got a free capability up to a certain number of documents and then after that you've got a 99-rand capability on a monthly basis and it goes up to 299. So it's a really affordable solution, even for the entrepreneur who is initially starting out, and I would highly suggest that an entrepreneur invest in using the platform, because if you can have your transacting history recorded from day one, that is gold. Data really is gold in the funding journey. Back to the point that you discussed earlier around how do I see you as an entrepreneur If I don't see you physically? I've got to see how you've been doing business and a digital platform such as SME Go actually enables that.
Speaker 2: 45:16
So, if I understand you correctly, that you guys at SMEgo, indeed, you do provide finding, but really what you're doing is you are helping the entrepreneur, the SME, develop that thing that my listener calls proper documentation. 100%. You're basically saying come here, I know that you don't have proper documentation. Come here, I know that you don't have proper documentation. Come here, I know that you are largely informal, but let me help you formalize. Let me help you formalize your application such that it is appealing to funders.
Speaker 1: 45:55
Absolutely, and I want to just also touch on a very important point. When you talk about formalize, we also highly appreciate that people that run their own businesses are pretty smart and on point and they know what they're doing. So our job is not to teach them how to run their business, but our job is really to make the journey of them running their business a lot easier, and we're doing this by giving them a tool that helps them to run their business and make it super easy and simple. So I mean, let's talk about a very simple example of Uthabo, the plumber right, who comes to your house, solves your plumbing solution.
Speaker 1: 46:42
When Uthabo leaves your house, he needs to solution. When Thabo leaves your house, he needs to have sent you the invoice there and then and you should be able to pay him there and our platform actually enables that because he can open his phone, send you, go on to SMEgo, the app itself send you the invoice, you would receive it and you'd be able to pay him directly via a payment link that he would have created, so that and you'd be able to pay him directly via a payment link that he would have created, and he doesn't have to go and figure that out. That's quite an important aspect that you're assessing that, as a business owner, you don't have to figure out what tools I must use so that I can get my transacting history and my trading history recorded so that I can then get funding. We're covering that journey for you so that you can focus on growing your business and doing what matters.
Speaker 2: 47:27
How do we get in touch with you, Nobesuthu, and start that journey of formalizing ourselves as entrepreneurs?
Speaker 1: 47:34
It's very simple, so we are available on the web. So it's www.smego.coza, or people can download the app on iOS, which is the Apple Store or the Google Play Store.
Speaker 2: 47:52
Thank you so much for joining us. Nobesuthu Ndlovu, the director of SME at Old Mutual Limited, thank you so much for joining us.