“There are currently three pilot projects: a Madagascar project which has been launched, a imminent Kenyan project and another project to be launched in Ghana in June next year,” says MD Jo Schwenke.
Business Partners International (BPI), a joint venture between Business Partners and the IFC will cater for all the needs of SME businesspeople, including researching their projects, assisting with business plans and generally mentoring existing and new SME businesspeople, with Business Partners providing the finance window.
Schwenke says that the pilot projects aims to invest some R70-million in Madagascar and Ghana, and R100-million in Kenya.
“If the pilot projects are successful they will become full blown in these countries, withpossible extensions into other developingcountries,” he tells Engineering News.
The pilot projects are successful if the company can relatively easily invest the money in three to four years and the risks are affordable.
Currently, Business Partners has 2 800 live deals in South Africa, with a record of doing some 500 deals per year to the cumulative value of R500-million.
“Since the company’s inception 23 years ago, it has made almost 30 000 deals for almost R6-billion,” Schwenke enthuses.
He says that the company invests in manu-facturing; professional and personal services; retailing; motor trade; travel and tourism; leisure; marine fishing; and building, plumbing andshopfitting.
The top three investments approved for the year ending in March 2004 were professional and personal services at 25,1%; manufacturing at 17,7%; and motor trade at 15%.
Financing is done in the form of a number of products that are used as a basis for the structuring of customised investment and added-value solutions.
The products are Equity Partner, Risk Partner, Royalty Partner, Property Risk Partner, Property Equity Partner, Private Equity and Venture Capital, Contract Partner and Business Partners Umsobomvu Franchise Fund.
“The Business Partners Umsobomvu Franchise Fund is a public- and private-sector joint venture between Business Partners and the Umsobomvu Youth Fund initiative of the national government,” he avers.
The Youth Fund was established in 2001 with the objective of creating new economic opportunities for South Africans aged between 18 and 35.
The fund’s initial investment allocation is R125-million, of which R100-million has been contributed by Umsobomvu, and R25-million of which has been contri-buted by Business Partners in the form of shareholder equity.
“The franchise fund has been con-stituted to facilitate access to all the opportunities and benefits of thefranchising industry for the country’s new-generation entrepreneurs and aimed at youth with some knowledge of and experience in business.
“Its objective is to provide investment financing for viable youth-owned franchises across all sectors,” he explains.
The company’s plan for the not-too-distant future is to increase its footprint to capitalise on skills available.
“We have found a way to adjust the management structure to create upward mobility in the company and give scope to some of the new people,” he informs.
“We are also planning on increasing our size drastically and having more funds available.” “If the country can increase its number of SME businesses from the current 600 000 to some 900 000,estimated employment for three-million people will be created.” The company approved 185 investments, to the value of R177,4-million, for historically-disadvantaged entrepreneurs during 2004, and 152 investments, amounting to R131,4-million, were approved for female entrepreneurs.
One such female entrepreneur started an aluminium casting company, manufacturing seatbelt spindles for the local vehicle market, ball-and-claw bases for baths in the export market as well as components that are used in the armaments industry.
“Sally Marengo is the sole owner of KPL Aluminium Die Casting and the business consists of three adjacent factories with a product range including fridge door handles for Coca-Cola,” he praises.
Business Partners is owned by Khula Enterprises Finance, Remgro, Business Partners Employee Share Trust, Sanlam, BHP Billiton SA, Absa, FirstRand, Nedcor, Old Mutual nominees, Standard Bank Investment Corporation, Anglo South Africa, De Beers Holdings and Standard Bank Nominees Tvl.