An increasingly unpredictable world means that it's becoming tougher to do business internationally. Pandemic and conflict have disrupted supply chains globally and increased inflationary pressure substantially. In South Africa, however, running a successful business is even more challenging because of high unemployment levels, floods, riots, and power and infrastructure challenges that have impacted supply and demand negatively.

But with any disruption comes opportunity and an ability to grow market share and profitability. South Africa has a highly developed economy and a resilient banking system, and we possess the skills and capabilities to compete globally. 

Taking advantage of disruption

While we face many challenges, South African businesses are well placed to step into gaps left by recent events and their impact on global trade. An example of this is the recent announcement that the Eastern Cape Department of Rural Development and Agrarian Reform has partnered with the United Nations (UN) World Food Programme, which seeks to upscale small-scale farmers in Eastern Cape, while boosting supplies for the UN World Food Programme humanitarian interventions that have been decimated by the interruption in supply of Ukrainian wheat.

The contribution of the small-business sector to gross domestic product (GDP) and job creation in South Africa cannot be underestimated. According to the International Finance Corporation, small, medium and microenterprises (SMMEs) contribute around 34% of GDP and account for about 91% of the formal business entities in South Africa. The Small Enterprise Development Agency's SMME quarterly update for January to March last year revealed that SMMEs employed 9.8 million people ─ that’s 64% of total employment across the economy, and the reason why the small-business sector is often referred to as the engine of employment creation.

The mid-corporate sector matters too

What is less well known is the contribution of the mid-corporate sector – those companies with annual turnovers of between R700 million and R2.5 billion. These companies span all industries and are literally the cogs that keep the wheels of our economy turning. Not only are they responsible for much of South Africa’s manufacturing and production, but they also create an ecosystem that supports and encourages growth of smaller businesses as suppliers and customers over and above the jobs they create. 

At Nedbank, we saw that the unique financial needs of this sector were not being adequately met and so the Principal Client Portfolio was born. As mid-corporate businesses require very different financial products and instruments to their small-business and listed counterparts, our philosophy is to not try to fit these businesses into our existing banking model with a one-size-fits-all approach. Instead, we strive to create bespoke solutions based on our in-depth understanding of each company’s complex business and financial needs.

Our business imperative is to build a sense of trust with our clients and obtain a deep understanding of their business and personal aspirations so that we can align banking solutions with their growth ambitions. We are a bank for the long term, and we have walked the journey with numerous small businesses as they developed and grew, with some ultimately listing on the JSE. Almost all businesses were once small and we believe we have a significant role to play by supporting their growth and sustainability along their entire journey. At Nedbank, we believe it is our responsibility to be there when there is an opportunity that may present itself only once in a lifetime as well as when there are setbacks like the Covid-19 pandemic.

Ultimately, we realise that the dynamics of doing business in South Africa can be frustrating, and that your bank must be flexible as the environment and market conditions evolve.

To find out more about how Nedbank can truly partner with you to grow your business, you can email us or go to our Commercial Banking website.