Credit

Emerging businesses in Africa fuel the economy and provide most of the local job opportunities. In South Africa, the Government has identified entrepreneurship and business development as important building blocks for a growing, sustainable economy. South Africa’s National Development Plan (NDP) states that about 90% of jobs in South Africa will be created through SMMEs by 2030.

As result, emerging businesses have tremendous opportunity for growth, if they can overcome the challenges SMEs face, especially in Africa. The major challenges include, limited access to financing and markets, limited trade skills and an overabundance of red tape.

Barriers to finance is perhaps the biggest challenge that businesses face, especially SMEs. Economic research shows that both start-up and existing businesses struggle to access capital to start or expand their activities.

Therefore, one of Ecsponent’s core business activities is providing secured credit to fund the business operations of qualifying entities.

Business Credit

The Secured Business Credit model provides wholesale funding to target niche businesses. The nature of these transactions is typically medium-term facilities, but with a short-term call-up to ensure liquidity for the group.

The vetting procedure for these transactions is stringent for both the business and its owners, as are the security requirements as in these transactions we never take an unsecured position. Additionally, we create frameworks to connect with the businesses and gain a deep understanding of their nature. This helps to manage our risk but also benefits the business as it has access to the advice and skills of the group, in addition the financial support offered.

Ecsponent’s Supply Chain Solution

The Ecsponent Supply Chain Solution offers considerable benefits to enhance the large businesses’ preferred procurement spending recognition on its B-BBEE scorecard. The solution potentially covers 55% of the scorecard measurement categories, including skills development, preferential procurement, supplier and enterprise development. It also adds value in the following ways:

  • Effective training of the vendor in respect of the transaction and related regulatory conditions, and especially the:
    • financial implications and cash flow management
    • functional guidelines to ensure effective procurement and sourcing
    • financial management of the cash flows in the vendor’s business (including VAT and other taxation provisions)
    • financial implications and cash flow management
  • Protection for all parties in respect of the potential fraud often associated with such transactions.
  • Large organisations can in turn:
    • deploy funding into the training
    • deploy funding into the transactions
    • receive greater BEE scores in respect of preferential procurement and supply chain development — enjoy the financial benefits of Ecsponent Procurement Services’ collective buying power and specialist procurement expertise.

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