Soweto’s economy is booming despite headwinds faced by SMMEs
Nedbank is helping small businesses in the township rebuild and thrive with integrated support, hands-on assistance and guidance from its bankers
Soweto is SA’s most populous township and is home to informal businesses and small, medium and micro enterprises (SMMEs) that are a crucial market segment contributing to the country’s GDP.
The 2021 SA Township Marketing Report found that spaza shops contribute 5.2% to our economy and employ 2.6-million people, while SMMEs in Soweto employ more than half a million people.
Difficulties faced by small businesses in Soweto
However, small businesses were severely affected by Covid-19 restrictions, with the Small Enterprise Development Agency’s quarterly update for January to March 2021 revealing that the number of SMMEs dropped by 11% from the previous year.
Sadly, small businesses were also among the hardest hit during the July 2021 unrest, with an estimated 50,000 informal traders affected in Gauteng and KwaZulu-Natal — a large proportion of which are in Soweto.
Further challenges Sowetan SMMEs face are limited access to trading spaces and financing opportunities, onerous government regulations and bylaws, and growing competition from large retail groups. With Soweto’s consumer spending power pegged between R5bn and R6bn a year, everyone is moving in to have a slice of the pie.
All of this indicates that uncertainty is the only certainty for all businesses — large and small. But small business support schemes have been provided across the board, with the likes of the National Empowerment Fund stepping up with funding to support SMMEs.
Nedbank participated in various government initiatives and introduced its own programmes to support SMME clients through the pandemic and unrest.
Brighter prospects ahead
Despite these headwinds, Soweto is awash with successful cash-intensive businesses, including restaurants, taverns, retailers and services, guest houses, B&Bs and other tourism and hospitality service providers. According to Reuters, many of these typically turn over R2m a year, indicating a booming township economy despite power issues and crime.
Nedbank is committed to helping small businesses grow and thrive. It was recently recognised as the best bank for SMEs in Africa at the Asian Banker Excellence in Retail Financial Services International Awards 2022.
The award validates the bank’s leadership in the SME banking space as a result of its holistic approach — which includes flexible and affordable transactional banking solutions, digital enablement and a comprehensive business support ecosystem.
Nedbank’s commitment to providing small businesses with integrated business support at all stages is a major reason for its growing popularity as a preferred SME banking partner. The bank’s national network of dedicated small business bankers is available to provide hands-on assistance and guidance.
Nedbank’s online banking and app channels come with free features, such as budgeting and invoicing solutions, and the free SimplyBiz network and support platform delivers business tools, inspiration and insights that go far beyond banking.
Maphosa is Nedbank’s area client manager for small business and private clients in Soweto.
This article was paid for by Nedbank.