Sanlam and ASISA partner to fast track enterprise development

The Sanlam Enterprise Development (ED) Programme, managed by the ASISA ED Fund, is another milestone in Sanlam’s journey to contribute to the economic transformation of South Africa and its people and follows the recent completion of its R15-billion Ubuntu-Botho black empowerment deal.

The Sanlam ED programme is unique in that it recognises that the real hurdle to sustainable growth for many entrepreneurs is a lack of experience and a need for mentorship. The focus of the program is therefore on incubating and developing small and medium businesses that show potential for future growth, rather than simply supplying grant money and expecting business owners to achieve growth on their own.

Dr Johan van Zyl, CEO of Sanlam and chairman of ASISA, says a strong entrepreneurial sector is critical to the success of South Africa’s economy. "As a Level 2 BBEEE contributor, our aim is to allow these businesses to be the best that they can be. By focussing on helping a few existing businesses, we know the ripple effect can be immeasurable in terms of job creation, skills transfer and revenue creation.” The 2013 Sanlam Sustainability Report shows that small and micro-enterprises benefited from 32% of the total procurement spend of R4,7bn, which was more than double the percentage of the previous year.

For the launch phase of the Sanlam ED programme, five predominantly black-owned businesses with high impact potential were selected by Sanlam’s implementation partner, the ASISA ED Fund. These businesses are either part of the Group’s supply chain or may be considered as suppliers in the future. The ASISA ED Fund is also responsible for providing financial and business development skills to these SMEs.

Jannie Rossouw, head of the Sanlam Business Market, says the Sanlam ED Programme goes a step further than many ED programmes. "It combines investment funding and business development into a single package. SMEs require more than just financial support in order to grow, and our programme offers tailored business development support followed by financial support timed according to the specific needs of SMEs. Those that qualify for funding are then provided with a further seven years of SME growth support through the ASISA ED Fund.”

The first five businesses were chosen based on their growth potential, value chain alignment, commitment to the programme, transformation, need for assistance, entrepreneurial ability, leadership capacity and geography. The programme aims to unlock their revenue growth, profitability, job creation, skills development and sustainability.

"For example, Liquid Thought – a digital strategy and innovations agency supplying web and mobile technology solutions – has been provided with business growth support and mentorship, scaling the enterprise to investment readiness. It is now receiving financial support through the ASISA ED Fund in order to sustain this growth,” says Rossouw.

Leon Campher, chief executive officer of ASISA, says the real power of the joint enterprise development initiative with Sanlam lies in the fact that this is not about money. "This is not a quick-fix project hoping to achieve long-term goals by simply pumping grant money into fledging small and medium businesses. This is about creating sustainable businesses able to apply their newly gained knowledge and skills to expand, thereby creating jobs and opportunities for others.”

As Sanlam’s implementation partner, the ASISA ED Fund is able to source high-impact SMEs through Sanlam’s procurement network and provide financial and business development skills to SMEs to benefit the industry as a whole.

Campher adds that the five businesses picked from the Sanlam procurement list, once ready for growth, will be added to an industry data base of preferred suppliers. "Not only are we incubating these businesses, but we are also setting them up for growth by exposing them to the rest of the savings and investment industry.”

Campher says the ultimate aim is to enable these enterprises to grow from small to larger businesses, and perhaps even be listed on the development capital market as a model. We’d also like to see them eventually repeat the programme with their own suppliers and in their own communities, he adds.

"We believe Sanlam’s investment in enterprise development will have a far-reaching impact if resources are channelled to those businesses that will, with the right assistance, be able to grow and create employment, or create other forms of social impact. This results in a truly sustainable commercial model to the benefit of both corporates and enterprises,” he says.

The Sanlam ED programme is currently being managed by enterprise development specialists, Edge Growth, and will conclude in July 2014. It will be followed by an extensive measure and evaluation process to determine the level of impact and growth achieved through the first phase of the programme.