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Some small and medium enterprises form part of South Africa s missing middle - companies that are too big to be funded as startups but considered too small for big investors.
Investment firm Secha Capital has been providing SMEs with capital and resources to help them expand.
Secha takes a minority stake in the company and provides capital of between R3 million and R15 million, but only invests for seven to ten years.
It s a common problem for small and medium-sized companies: they may succeed at first, but struggle to get the funding they need to grow.
For example, in the past few years, South Africa has seen the emergence of haircare brands such as Hair City and Native Child, which have proved popular with consumers. And yet securing the capital and resources for expansion has remained a challenge.
Last year proved that SMEs are the backbone of the South African economy. Yet, existing debt, lack of cash reserves, outdated financials, and an inability to operate during the national lockdown, forced almost half of South African small businesses to shut down.
Kuhle Mnisi, operator investor, Secha CapitalWithin the SME space, investors play a huge role in helping small businesses – not just with financial capital, which is greatly needed within the industry, but by providing them with on-the-ground support as well. From the local manufacturing of sneakers and healthy snacks, to the production of wigs and haircare products for women, South Africa has a variety of unique small businesses that need guidance and resources – now more than ever.