Financial services group, Sanlam, has joined forces with SANParks to launch their Kruger National Park-focused R10 million (€487 855) SMME funding and support programme, implemented by the I Am An Entrepreneur programme – an apex platform focused on supporting entrepreneurs to grow their businesses.

Over the last few years, inflation has caused the cost of debt to skyrocket, making financing inaccessible to many SMMEs. This has major implications in South Africa, where about 34% of total GDP comes from the small business sector.

The I Am An Entrepreneur pilot programme, launched six months ago, shows the ripple effect that the impact fund – based on a zero-interest loan – can have for entrepreneurs and their communities, notes Ray-Ann Sedres, Chief Transformation Officer at Sanlam.

She explains: “Many small-scale suppliers have excellent ideas. However, they don’t have the resources, experience, or reputation to compete with established incumbents.”

Sedres adds: “According to a joint study by the University of Florida and SANParks,  the Greater Kruger National Park contributes about R2.6 billion (€126m) to the nation's annual GDP. However, the unemployment rate in Mpumalanga remains high, at 36% (Q4 2022). Kick-starting sustainable SMMEs in the area is one of the surest ways to generate jobs.”

According to her, the programme is a case study showing how interest-free funds could unlock SMME growth.

A unique model

The fund is aimed at SMMEs that operate within a 50km radius of the Kruger National Park and are awarded purchase orders from SANParks. Thus far, the programme has had 23 approved and funded applications, comprising 57% youth and 43% women, who collectively received a tranche of R5.4 million (€233 225).

Keitumetse Lekaba, MD of I Am An Entrepreneur, says the fund is unique as it is an accessible omnichannel that is language-friendly, and easy to apply.

“It’s been a pleasure seeing the impact this has had on entrepreneurs’ lives and the Kruger National Park.” By championing smaller service providers, the fund additionally provides SANParks with access to efficient supply. SMMEs can operate nimbly and at speed, while adeptly accessing local products.

Lekaba highlights that this empowers SANParks to offer outstanding services and products to its clients, while directly benefiting the local communities it operates in.

The Mpumalanga Province’s 2023 Socio-economic Review outlined an ambitious target of generating 447 000 additional jobs by 2024, with the aim of dropping the unemployment rate from 36% (2022) to 25% by year end. It believes the best way to positively impact poverty is through job creation. SANParks and Sanlam are contributing to this by supporting SMMEs to scale sustainably.

Sedres adds that, as a corporate, Sanlam has a vested interest in growing the economy, “An economically active society means a thriving economy, which has a direct bearing on the relevancy and need for financial solutions.  It also ties deeply into our purpose to empower all Africans to be financially confident, secure, and prosperous.”

Overcoming SMMEs’ biggest barrier

Sanlam, SANParks and I Am An Entrepreneur recently visited the beneficiaries in Kruger to chat about their progress in the programme. Many made mention of how the fund had helped them overcome their greatest challenge – accessing financing.

Lebogang Gondwe, fund beneficiary and founder of Yellow Sauce, which specialises in insecticide, said lenders had previously charged him between 25% and 50%, which ate up most of his profit. “They are the ones who are benefiting, not us. But with this fund, the team behind this programme have really helped us.”

Fellow beneficiary Vuyani Ngcani, the founder of Lusando Trading, echoed this. “When you get tenders or supply and delivery work, and you get the money to do the job, some lenders put on too much interest. No capital caps business growth, with SMMEs scrambling just to pay back the high interest they owe.”

Sedres adds: “Interest-free loans are game changers for SMMEs in the country, so that entrepreneurs can use the profits they gain from their contracts. This programme has shown that helping one SMME has a ripple down the chain of impacted beneficiaries in their lives.”

Looking to the future

The fund beneficiaries have their sights set on expansion. Sindi Mathebule, founder of Mamapre, said she was determined to see her business grow, “My dream is to get more people employed, expand to other provinces and just to be involved in the economy.”

Lerato Simelane, another beneficiary and founder of Leratolwandle, said her business success had inspired others, “My friends wish me well and they want to start their own businesses because they can see how my business is growing.”

Sedres said Sanlam and SANParks were hoping more partners would join them. “SMMEs are forecast to generate 90% of the 11 million jobs our nation needs, according to the National Development Plan.

“We want to create more funds so we can have an even greater impact in this country and fund more SMMEs. We need more corporates to join us, along with government departments, so we can help our small business sector grow and flourish. To avoid the unemployment rate increasing even further, we need to act swiftly and collectively.”