Business opportunities in the energy sector workshop for Women 16 17 September 2015 Andy Thaele
An Absa Enterprise Development Programme The Programme creates Procurement Ready enterprises that are reliable and valued participants within corporate or government value chains. CORPORATE / GOVT ENTITY SME Agreement must be in place ACCESS TO MARKETS ACCESS TO FINANCE NON FINANCIAL SUPPORT Components of an ED programme Programme relies on corporate / govt. entity value chain Access to Markets all SMEs granted access to the Procurement Portal, an online platform where they become visible to a corporate buying public We design ED programmes that increase the competitiveness of the SME and monitor impacts during and after the programme. Access to Finance our R250m ring-fenced development fund provides unsecured lending for SMEs part of the programme. An end-to-end Business Banking solution is tailored for the SME. Non-Financial Support the SME is supported to ensure it becomes financially and operationally robust. Training can be delivered through our Entrepreneurship Centres in the major cities 2 Enterprise Development
Procurement Portal www.scnet.co.za ACCESS TO MARKETS 3 Enterprise Development
ED Programmes Access to Markets Introduction An online platform where corporate buyers can discover credible and empowered suppliers quickly and accurately Your challenges Admin RFQ Search ROI Is your vendor management process manual, paper based Do you spend time chasing expired compliance docs? Is your preferential procurement reporting inaccurate and difficult to maintain? Can you eliminate paper and manual assessment from your Request for Quotation processes? Do your buyers struggle to find credible and empowered suppliers? Can you demand a Return on Investment from your Supplier Development Programme? Procurement Portal solutions The time-saving Absa Procurement Portal provides Technology for you to manage your community of suppliers online. SME profile scores linked to procurement compliance you can quickly identify compliant SMEs erfq electronic Request for Quote Paperless online electronic RFQ technology. Tender Bulletin Advertise tender opportunities to potential new suppliers. Save advertising costs and still reach a wide supply base. Our technology allows you to search by: Verified Profiles, Industry Sector, Business Keywords, Empowerment Sponsorship of premium supplier fees on behalf of SMEs qualifies as ED expenditure in terms of DTI Codes of Good Practice. ACCESS TO MARKETS Stats: 20 000+ SMEs registered on the Portal 3 000+ active buyers 50+ Corporates are active buyers on the Portal 16 000 tenders advertised to SMEs on the Portal 4 Enterprise Development
Detailed Proposal: Access to Finance What is available A tailored solution ACCESS TO FINANCE WBHO Fund available for financing of SME contractors Absa R250m ring-fenced fund Pricing risk-based pricing Collateral requirement lending may be unsecured Tenor matches tenor of contract awarded to SME. Finance expansion and working capital finance Products relevant Business Bank products overdraft, term loan, transactional, investment, insurance, commercial property, asset finance Post finance controls receipts into an Absa account, a hold is placed on account, Absa will pay 3 rd parties and make transfers on SME s behalf before SME can access funds Facility granted to SME against WBHO contract End-to-end financial solution for SME Absa controls account into which funds received Facility structure Unsecured lending permitted Risk-based pricing A Business Banking products package structured for SME Structure in VAT payments to achieve compliance Requirements SME Evidence of affordability from cashflows arising from contract. if VAT payment made, affordability must remain Poor credit record to be justified, payment plan in place Credit assessment conducted on SME Must move business banking to Absa 5 Enterprise Development
Enterprise Development Programme details Criteria for Corporate / Govt entity backer Positive Credit view Minimum turnover R500m Must enter into an ED Programme agreement with Absa Undertakes to select participant SMEs support participant SMEs with contracts, technical support pay SME into an Absa account Criteria for participating SMEs Turnover under R50 million and at least 50% black owned Selected to participate in an ED Programme Been awarded a contract under a programme Move all business banking to Absa Be able to justify adverse credit record, have a plan in place to remedy this Development Fund R250m ring-fenced fund Pricing risk-based pricing Collateral requirement lending may be unsecured Tenor matches tenor of contract awarded to SME. Finance expansion finance and working capital finance Products relevant Business Bank products overdraft, term loan, transactional, investment, insurance, commercial property, asset finance Risk mitigants guarantee schemes, non-financial support, market access intervention 6 Enterprise Development
Alternative funds ABSA Empowerment Funding Solutions 1. Absa Women Empowerment Fund 2. Absa Development Credit Fund 3. Thembani International Guarantee (51% black ownership) 4. SME Fund (100% black in ownership, control and top management) 7 Enterprise Development
ABSA Women Empowerment fund Funding will be provided to all Women SMME s. Women that do not meet the criteria for normal Business lending and therefore do not have access to normal banking channels where the following items are present: Insufficient tangible security as required by Credit Providers; Lack of own capital to start up the business; Lack of own contribution Lack of credit history In certain cases bad credit record; to be justified with reasons and explanations Applicants must be South African female citizens who reside permanently in South Africa. The major shareholder (more than 66%) of the Business must be fully operationally involved in the business (day-to-day basis) excluding other business interest. Entrepreneurs should have the skills and or expertise relevant to Business and/or the industry/sector. 8 Enterprise Development
ABSA Women Empowerment fund Well researched business plan. Demonstrate profitability via historical financials and / or a realistic Cash flow forecast Loan amounts - Min R50k & max Loan amount R 3mill The preferred term of loan should be a maximum of 5 years and monthly Reducible Overdrafts Structure the payments of the loan directly to suppliers (70% of the loan to be paid to suppliers) Repeat loans are allowed; once initial loan has been repaid in full. Exclusions: Money raising, Enrichment, All trust, Public Companies, All Section 21 Companies; Commercial & Residential Property Finance 9 Enterprise Development
NON Financial support: Centres of Entrepreneurship Absa s Entrepreneurship Centres are destinations for SMEs to access business support, funding advice and infrastructure. For Absa and our corporate and government entity partners, the centres provide the venues to engage with SMEs The Entrepreneurship Centres offer: NON FINANCIAL SUPPORT Workshops Guidance on business plans, cashflows, accounting principles Compliance: licences, permits, tax, BEE, CIPC registration Entrepreneurial skills: financial literacy, business principles Network Platforms Networking opportunities at seminars, workshops etc. Training The Absa EDCs train on average 8 000 SMEs and touch 35 000 SMEs annually through conferences, seminars and workshops. Infrastructure Workstations desktop and internet Meeting and multimedia rooms Support: biz registration, B-BBEE certificates Library of business information Benefits to corporate / government entity partners Sharing in the cost contributes to their ED spend They leverage off our partners who provide connectivity, hardware, software Share cost of interacting with SMEs with Absa 10 Enterprise Development
Thank You 11 Enterprise Development