Business Partners, a specialist risk finance company for formal small and medium enterprises (SMEs), has launched a R300m ($27m) manufacturing fund, which aims to assist SMEs that operate within the manufacturing sector.

According to Nazeem Martin, MD of Business Partners, a stimulated manufacturing sector will have a spin off effect on businesses operating within other sectors such as the service industry, and will result in a positive boost for the economy.

Martin said that a healthy manufacturing sector is an enabler of sustained economic development and will contribute substantially towards healthy GDP growth. “

In a developing country a healthy manufacturing sector is vital for ensuring economic prosperity, job creation and making a positive and considerable contribution towards other sectors that will ensure economic growth,” he said.

Between 2000 and 2013 the manufacturing sector’s contribution towards South Africa’s GDP shrank from 19% to 15.2%, according to Martin.

“This drop should be considered a serious concern in an economy where foreign exchange via exports is vital, and the beneficiation of the country’s rich natural resources could positively contribute towards its growth,” he said.

According to Trade and Industry Minister Rob Davies, stimulation of the manufacturing sector is vital for job creation, and that there should therefore be a drive away from consumption-driven and import-intensive products.

Currently, the manufacturing sector employs 1.7 million people, and has the potential to grow substantially.
“Although the larger manufacturers are the dominant players within the sector, SMEs can play an important and deserved role. SMEs are known for playing a support role to large businesses, but the potential exists to supply the market both locally and internationally with high quality products at competitive prices,” said Martin.

“Business Partners has been financing SMEs for 33 years, and has now identified an even greater need to support those who are involved in manufacturing. A strong manufacturing sector will have a spin off effect on other industries and will add value to the country – just what our struggling economy needs. The creation of new jobs by SMEs playing in the industry should also not be underestimated,” he added.

The Business Partners Manufacturing Fund will not only offer financial assistance, but will also provide the support and mentorship that Business Partners currently offers. 

“The mentoring and counselling services are aimed at reducing the risks associated with the industry, and as part of this industry information will be shared, forums will be formed and topical matters will be circulated via a web-based library,” said Martin.

“Our offering is based on wanting SMEs to flourish and we have been instrumental in growing small family businesses into market leaders,” he added.

The fund was launched as part of Business Partners’ Entrepreneurship Campaign, aimed at stimulating entrepreneurship in South Africa – the square peg movement.

As part of the campaign a series of specialised funds will be launched, each focusing on the upliftment of a particular local industry.

“With the launch of our new entrepreneurship campaign, we aim to not only achieve a greater developmental impact in the local SME sector, but also to ensure profits for our local entrepreneurs, thereby ensuring sustainable growth for the South African economy,” said Martin.