It’s been said that when it comes to investing, what is comfortable is rarely profitable. That is the premise that we need to work from when investing in South Africa. We are undoubtedly in an economic downturn with consumer and investor confidence at an all-time low. But we need to be careful of misinterpreting the downturn as the destination.

As a nation, we can’t help but be exposed to the on-going political narrative.  Relentless, sensationalist news headlines feed our insatiable appetite for negativity and do little to engender confidence in our robust, open democracy. But the notion that nothing has changed is misguided.

In the 18 months since Cyril Ramaphosa took over the Presidency, there have been significant changes within our government departments and SOEs, the NPA, SARS, and numerous other institutions to root out corrupt and non-performing officials. Unfortunately, this clean up goes far deeper than what we see in the press.

Political journalist JP Landman writes about Reclaiming the State and it’s time that we acknowledge that we are at a pivotal point in the country’s growth whereby we need to reclaim the economy.

Surviving a political era plagued by corruption and blatant looting has resulted in a wait-and-see approach from the private sector, characterised by very little new investment.  At the same time, the last estimate revealed that corporate South Africa has over one trillion rand in cash that they are not reinvesting into the economy. The resounding message is that we shouldn’t wait for foreign investment to reverse the current trend but look to our local businesses to create a virtuous positive cycle in economic growth. A cycle whereby we will, by default of the investment, see wage growth, higher consumer spend, businesses generating more turnover and higher employment across the board.

For many corporate leaders, deploying these funds comes down to policy certainty from government in key sectors of the economy around quotas and land expropriation, for example. Creating a framework around the agricultural, mining and fishing industries to protect the business owner’s investment is a powerful way to reignite the economy, create new jobs and make strides towards reaching NDP goals.

If necessity is the primary driver of invention, the same is true for our re-invention as a growing economy. We have a strong culture of innovation and entrepreneurship and as business leaders, we need to create a supportive, enabling environment for the economy to grow.

We have pioneered the cash-flow funding model that has disrupted the SME market by closing the gaps between entrepreneurs and access to working capital. We are continuing to support SMEs with our latest asset finance offering that allows small businesses to buy capital equipment over five years and give them the tools of trade they need to grow.

We are also planning to launch a debtor’s finance product, unsecured finance to SMEs and later, we will introduce insurance for small business owner to protect them against risk.

To create an enabling environment, we also need to acknowledge that how businesses and sectors operate is fundamentally different to that of 10 or 20 years ago. Therein lies an opportunity to cut red tape and re-engineer the way we weigh up risk and reward when it comes to investment. That was the premise behind the development of Recap, a Retail Capital solution that allows us to prequalify businesses with rich data for funding in as little as 30 seconds. The process is completely digital by way of a cloud-based app and the money is paid out the same day. Recap is just one example of how much more agile and responsive we need to be to build our economy.

The reality is that as a country, we don’t have to be perfect before we invest. We simply need to be moving in the right direction, which I believe we are. The NDP clearly outlines our needs as a country in terms of the economy and job creation, among other crucial socio-economic issues. South Africa has a long track record of resilience and innovation. The next ten years presents an opportunity to take a risk on our country, reclaim our economy and reap the rewards.

Article by Karl Westvig, CEO Retail Capital

Since 2011, we have provided businesses with innovative, flexible and convenient alternatives to traditional business loans. Business owners still identify access to working capital as the single biggest challenge that they are faced with. Being responsible for 50% of the country’s GDP and contributing to over 65% of employment, we are devoted to partnering with small to medium-sized businesses to grow the South African economy. This is where we can help and we are proud to have partnered with more than 15,000 SMEs in providing funding of more than R2.5b billion to date.

Need Help? Chat with us