Absa protects the growing SME sector

The Small and Medium sized Enterprises (SME) sector in South Africa has shown remarkable growth since 1995, with an increase of 150% to consist of more than 2 million small businesses. A further 100 000 new such businesses are envisaged for the period leading up to 2010.

The Department of Trade & Industry suggests that 80% of new job opportunities created in South Africa are in the SME sector, underlining the importance of smaller companies to the countrys future prosperity.

Yet up to 35% of these jobs are lost again within two years due to the barriers of entry for small business that include legislative and administrative red tape. Coupled with these are the risks associated with unexpected and forced closure of the business due to theft of equipment, stock, fire or flood.

Until now, SME owners who wanted to factor insurance into their planning, had to search through a variety of options to cover their needs individually; often having to take the risk of not covering some risks adequately.

In an effort to further strengthen the ability of SMEs to operate their businesses resiliently, Absa has introduced a tailor-made packaged insurance solution aimed at this sector, called SME Protector.

"Owners of small and medium businesses with an annual turnover of less than R10 million, no longer have to individually consider coverage options across a range of service providers to ensure that all their business risks are covered," says Dan Moeti, General Manager Absa Insurance Services.

SME Protector is an innovative packaged risk solution, packaged with the right combination of traditional and specialised insurance structures to reflect the needs and requirements of small businesses.

"Often having similar needs to cover for their risk exposures, these business owners can now pay competitive premiums as they don't need to sign-up for individual policies anymore, says Moeti. This means that clients are not subject to unnecessary insurance clauses and features, as SME Protector is a cost-effective investment vehicle for the sustainability of their businesses.

SME Protector will focus on businesses in the following sectors: hospitality accommodation (B&B's, Boutique hotels, Guesthouses and Lodges), retail outlets and office parks. Provision has also been made for business owners to top-up and develop their portfolios from the package to meet their additional risk and insurance needs as their businesses grow and risks diversify.

For many years Absa has actively been involved in stimulating the SME market in SA. Earlier this year, it renewed an agreement with the Industrial Development Corporation (IDC) to the value of R400 million. This initiative is aimed at making financing more accessible to small businesses. Another such initiative is Absas partnership with Khula Enterprises to further strengthen its commitment and funding support for small start-up businesses.