How Africa's Top Entrepreneurs Can Reach Global Markets

Derek Newberry — Thu, 10 Apr 2008 10:03:39 -0500

April 10, 2008 - 10:00, Business Report

How Africa's top entrepreneurs can find the path to global markets

Story Link: http://www.busrep.co.za/index.php?fSectionId=&fArticleId=4346079

Teaser:
Swaziland alone has 70 000 such micro enterprises. Why is this the case?

Money? That's usually what an SME owner will say. Indeed, SMEs needs capital to start up and expand. In developed economies, most start-ups are self-financed with help from the four Fs: founders, family, friends and foolhardy strangers.

In Africa this strategy is possible only for a lucky few. For unproven entrepreneurs, or those lacking adequate collateral, capital can be very hard to come by. Here, most banks are lending at prime (currently 14.5 percent), plus between 2 and 4 percentage points for the riskier SMEs - a heavy debt burden for a start-up enterprise.

Swaziland alone has 70 000 such micro enterprises. Why is this the case?

Money? That's usually what an SME owner will say. Indeed, SMEs needs capital to start up and expand. In developed economies, most start-ups are self-financed with help from the four Fs: founders, family, friends and foolhardy strangers.

In Africa this strategy is possible only for a lucky few. For unproven entrepreneurs, or those lacking adequate collateral, capital can be very hard to come by. Here, most banks are lending at prime (currently 14.5 percent), plus between 2 and 4 percentage points for the riskier SMEs - a heavy debt burden for a start-up enterprise.

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How Africa's Top Entrepreneurs Can Reach Global Markets