Small business and entrepreneurship have been identified as key levers for tackling unemployment in South Africa but with a highly-concentrated economy and sluggish economic growth holding back SMEs, innovative new solutions are required to kickstart this critical segment.
Enterprise Development (ED) and Supplier Development (SD) initiatives have been identified as one of the mechanisms for empowering entrepreneurs, but many of the traditional tools for ED and SD are expensive, hard to implement and challenging to measure a return on investment.
Why does ED / SD matter?
As a business operating in South Africa, you are expected to make a contribution toward either ED or SD. This contribution will vary depending on which sectors you operate in, but the guiding principle behind this is to broaden the SA economy and develop new black-owned businesses.
For businesses looking to tackle weaknesses in their Black Economic Empowerment (BEE) scorecards, ED and SD are powerful tools for addressing shortfalls that you might have.
A solution for businesses to implement?
“Enterprise or Supplier Development is too expensive to implement” is a common argument from businesses who want to support entrepreneurs in their sector but do not have the skills to implement appropriate initiatives.
In response to this challenge, local asset management firm Inyosi has developed a range of innovative funds where local businesses can invest from as little as R20 000, accrue ED or SD scorecard points (depending on their sectors) and can see their capital managed by experts with a proven track record of developing entrepreneurs.
Below is the performance of the Enterprise Development Fund since inception: