IconAlternative Investments
IconAsset Managers
IconAssociations and Institutes
IconBBBEE Consulting and Verification Agencies
IconConsumer Protection
IconCorporate Governance
IconCredit Bureaus
IconFinancial Planners
IconInvestment Consulting
IconLinked Investment Service Providers
IconListed Equities
IconOnline Share Trading
IconParticipation Bond Managers
IconProperty Unit Trusts
IconRegulatory Authorities
IconStock Exchange
IconUnit Trust Fund Managers
IconWellness Programs
Advertise Here
  Subscribe To »

Lack of access to finance hinders growth of African small businesses






Doing business in other African countries has grown exponentially in the last few years. The continent presents major potential in terms of cross-border opportunities and the majority of Africa’s small businesses have the ability to grow at a rapid rate if certain challenges are overcome.
Barron, Africa’s largest promotional clothing organisation, hosted its first Barron Africa Forum to engage its Africa reseller client base. Countries who formed part of the discussion were the Democratic Republic of Congo, Angola, Zambia, Swaziland, Zimbabwe, Ghana, Lesotho, Malawi, Mozambique, Nigeria and Swaziland. During the two-day discussions, it became evident that the main challenge hindering small business growth across the continent is access to finance.
Most African countries do not have advanced credit systems, so access to capital and trade funding remain a key obstacle. There is a high demand for capital in order for businesses to grow, however, the majority of financial institutions are skeptical of lending small businesses finance due to various market uncertainties such as high interest rates and inflation associated with volatility in these markets. Other factors such as trading in foreign currencies and how to deal in these currencies versus the local currency in market also play a crucial role.
Barron’s CFO Stefan Smit highlighted the need for established organisations to add value to small businesses by becoming more of a one-stop-shop. This requires moving towards more solution-based partnerships as understanding clients’ needs becomes ever-more critical.
“Over the years, it has become evident that we as Barron need to find experts within the credit and risk industry – which has led to us forming a relationship with Credit Guarantee because of the organisation’s extensive track record and experience across the African continent, particularly in terms of trade credit insurance.”
Typically, the payment cycle of doing business in Africa is between 30 and 90 days – and a 90-day wait for payment can have a negative impact on the cash flow needed to sustain the business.  A solution with the potential to bridge this gap is trade credit insurance: it removes unnecessary risks by insuring a debtor’s payment risk with a reputable company. This gives the insured party peace of mind that their organisation will always be paid.
In this way, trade credit insurance gives businesses the confidence to explore higher risk opportunities that organisations normally avoid for fear of non-payment. It protects cash flow by replacing cash promptly should customer insolvency or payment default occur.
Trade credit insurance is only one of the ways that established organisations can help small businesses across Africa grow. The most important thing is to keep having the conversations that bring these solutions to light. “Barron is committed to engaging and facilitating discussions between its Africa resellers and pool of service providers to enable their businesses to reach absolute growth,” Smit says.  
Source: FleishmanHillard
« Back to previous page Print this page » |

Breaking News »


According to the 2019 Old Mutual Savings and Retirement Monitor, less than 30% of people are saving for emergencies and more than 42% are not making contributions to formal retirement savings. Coupled with this, ...
Read More »


What SA investors can learn from the case of Greek government bonds

Justin Floor, PSG Asset Management   Ten-year Greek government bonds – deemed ‘uninvestable’ at the height of the eurozone crisis – are currently yielding 2. What makes this ...
Read More »


Introducing Our New Website!

The Insurance Gateway® team is excited to share our new website with you. Given our strategic objectives for 2019 and the fact that our last website redesign was over five years ago, we decided on a much anticipated ...
Read More »


Exciting prospects in both equities and bonds, despite negative sentiment

A prolonged period of poor performance from the local equity market has left many investors anxious and frustrated. While most understand the importance of taking a long-term view, it’s usually more difficult ...
Read More »


More News »


Healthcare »


Life »


Retirement »


Short-term »

Advertise Here
Advertise Here

From The Glossary »



Provisions in a policy or treaty that excludes certain types of risk from coverage under the policy or treaty. Two of the more common exclusions are in connection with aviation and war (e. g. ‘insurance is payable upon death except if resulting from piloting an airplane’).
More Definitions »






Contact IG


Media Pack


RSS Feeds

By using this website you agree to the Terms of Use.
Copyright © Insurance Gateway (Pty) Ltd 2004 - 2019. All Rights Reserved.