Nov. 17, 2004, Washington, D.C.
—Women-owned small and medium enterprises (SMEs) in South Africa will gain access to a comprehensive package of business-enhancing services under a new initiative the International Finance Corporation announced today.
IFC, the private sector financing arm of the World Bank Group, is providing $150,000 in grant funding to scale up the Women Entrepreneurship Program it initiated in South Africa in 2002. The program gives women entrepreneurs the tools and guidance they need to build their businesses, thus creating jobs and developing sustainable new income for both the entrepreneurs themselves and the workers they employ.
University of Pretoria research has found that women-owned businesses in South Africa are generally less competitive than those run by men, and that women entrepreneurs are also typically less equipped to present a convincing business proposal to prospective financiers. This discrepancy is mainly attributable to the multiple roles women are expected to fulfill in South African society, which limits their access to essential business services and industry information.
In response, the Women Entrepreneurship Program targets promising women-owned SMEs that to date have had little access to loans from the county’s mainstream banks. Those meeting its entry criteria participate on a cost-share basis, receiving high-quality training, mentoring, marketing advice, and assistance in preparing their own business plans that are then submitted to local banks.
The program is managed by IFC’s regional SME development program, the Africa Project Development Facility (APDF), and has trained 45 women in its initial pilot phase. Additional support comes from partners such as the country’s leading SME lender, Amalgamated Bank of South Africa (ABSA); the training arm of the University of Pretoria; the South African Department of Trade and Industry’s Gender Unit; local management consulting firm ECI Africa; and others.
The new phase is being supported by IFC’s Technical Assistance Trust Fund and will be rolled out nationwide over the next year. It builds on the program’s initial successes with businesswomen such as Hlengiwe Hlophe. She joined the program to increase the number of loans issued by her low-income housing finance business, Peulwana Financial Services. APDF aided her in producing marketing material and assisted with credit guarantees for the company, helping it grow by 30 percent.
The program also assisted Tau Li Mesana Consultancy, a cleaning company owned by two black women entrepreneurs. Its managing member, Nthati Khama, recently announced that the firm had been awarded a R3.5 million (approximately $578,000) contract by Metro Rail, based on the tender document submitted using the business plan formulated during the WEP training program. The contract has enabled Tau Li Mesana Consultancy to employ 12 additional staff members.
“Women are an often overlooked segment of the South African economy, and one that holds unrealized potential for growth,” says Richard Ranken, Director of IFC’s Africa Department. “We believe they have the potential to be a powerhouse. Matching high-potential women-owned firms with WEP’s program of services will help this happen.”
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY04, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY04 was $17.9 billion for its own account and $5.5 billion held for participants in loan syndications.
