Working capital management is crucial for SA entrepreneurs in current economic climate

It’s a tough time for entrepreneurs, between interest rate hikes affecting the bottom line and eating into cash flow, and fuel price hikes that push the costs of doing business even higher. Add inflation, skills shortages, load shedding, and the onerous administration that’s synonymous with running a small or medium enterprise (SME) in South Africa, and it’s easy to see why the country’s emerging companies need all the support they can get.

“Business owners currently need to consider the impact that future interest rate hikes will have on their business, the knock-on effect on their ability to service their debt, and finding ways to stay sustainable,” says Natisha Lazarus, Head of Business Banking at Sasfin.

“Working capital management is a crucial focus for small business leaders during this time when macro-economical factors make for a complex operating environment, with many business owners not understanding what type of finance will best fit their operating model,” she says. “They are generally engaging with ‘Big Banks’ that don’t have a deep understanding of their business and its funding requirements. As a result businesses are seeking to build relationships with banking executives who have a love for finance, a passion for innovation, and a commitment to helping each client find the most holistic solution possible for their particular business.”

While lending may be a catalyst for a business owner to approach a bank, each business owner has unique needs and risk-based characteristics that influence their banking relationship.

“There was no better time than Women’s Month to highlight that women entrepreneurs are great business partners for Sasfin, and we’ve noticed that woman-owned and -led businesses are contributing more than ever to the economy,” says Lazarus.

“Women tend to be quite conservative when it comes to acquiring debt, as they have a deep understanding of the impact of the ever changing economic cycles, and the knock-on effect  to service debt. Our close relationships with our customers over the years has shown us that loans granted  to female customers have a greater chance of recovery because they make it their focus to be in tune with macroeconomic events,” she says.

Sasfin’s support of this sector is enhanced by a R600m funding portfolio against a secured guarantee from FMO, the Dutch Entrepreneurial Development Bank, which was designed specifically to provide loans to women, youth, and businesses impacted by COVID-19. This arrangement made Sasfin the first bank in the world to receive the NASIRA guarantee, after its focus on financial inclusion and innovation was highlighted.

“The guarantee makes it possible for us to provide women entrepreneurs with working capital solutions that are more flexible, and our business banking team is determined to assist each business owner with funding that is aligned to their business cash flow requirements.” Lazarus adds.

As a firm believer in wanting people to grow and excel, her leadership philosophy is driven by empowerment and enablement both within her own environment and in South African business as a whole. Lazarus believes it’s vital for any leader in business to be genuinely available to their customers and their people.

“Women in business are particularly good at nurturing growth, inside our own teams and with the clients we engage with,” she says. “While strategic decisions should always be underpinned by economic value, sometimes you need to combine your head and your heart, and bring the human element to decision making.”

As a female leader in a largely male dominated industry, Lazarus has successfully merged her three decades of financial services experience with a focus on compassion and relationships, as she leads Sasfin’s growing Business Banking portfolio, with its product suite that has been specifically designed to enable SME growth.