The JSE in place to help SMMEs to achieve NDP targets

Most fast-growing countries, with high levels of employment and investment, treat their entrepreneurs and innovators like rock stars. They nurture and cheer on these daring risk-takers as they push them to build competitive and profitable businesses with global footprints.

The significance of small, micro & medium enterprises (SMMEs) as key drivers for economic growth and employment is also highlighted in the National Development Plan (NDP), the government blueprint for developing SA into a thriving, technologically advanced economy with world-class infrastructure and a highly skilled population by 2030.

The NDP envisages SMMEs helping propel the economy to 5% annual growth by 2030, with 60%-80% of economic value generated by SMMEs and expanding businesses. At this growth rate, 90% of the millions of new jobs that would be created would be generated by SMMEs.  Logically, the next best course of action to follow is to encourage innovation, which facilitates creation of new businesses along with well-paying, sustainable jobs.

We are eight years away, meaning the targets should be within our grasp if the necessary economic reforms are carried out and agreed policies implemented. We must pull out all stops to grow SMMEs and bring new investment into our country to reverse the unsustainable unemployment level. This is a national imperative that all South Africans should embrace and support.

The JSE is committed to backing efforts aimed at stepping up the development of new entrepreneurs, some of whom will grow and list on the JSE. The exchange, which will be turning 135 this year, has a long track record of facilitating capital-raising businesses and entrepreneurs looking to accelerate their operational and market expansions.

In 2003 the JSE launched the alternative exchange (AltX), which served as a nursery for the exchange’s main board. Successful companies like banking group Capitec and private school operator Curro listed and raised capital on AltX before graduating to the JSE’s main board. Capitec has become a R200bn company, while Curro’s market capitalisation has grown to about R7bn.

As an expression of its commitment to supporting the development and growth of SMMEs the JSE has launched the JSE Enterprise Acceleration Programme, a nine month initiative that takes in two cohorts a year, made up of about 15 companies each. This long-term initiative aims to support medium enterprises to scale up through growing market share, accessing funding and improving their competitiveness.

Companies that qualify to be in the programme must have a R20m annual turnover and be founder-led, entrepreneurial SA businesses in operation for at least two years. Where necessary, this initiative leverages the JSE ecosystem to help companies raise equity capital through the newly established JSE Private Placements business, in partnership with Globacap, a private placement platform.

The performance of participants in the programme is tracked and measured using key indicators, focusing on specific areas of business performance such as revenue growth, management skills, investor readiness and market competitiveness. This performance-based approach primes participants for acceleration.

The JSE’s contribution to enterprise development is not only limited to accelerating medium enterprises. It has several enterprise development initiatives, whereby it also partners with the private sector and government to explore better ways of cutting red tape to create a conducive climate for SMME growth and development.

Institutional voids that hold back or frustrate enterprise owners are usually related to regulatory, licensing and tax compliance, not to mention access to funding for early-stage businesses seeking to take off. Our enterprise development efforts have also extended to supporting transformation in the financial services sector, to which the JSE is integral.

In 2016 the JSE launched an Enterprise Development Programme aimed at stimulating the growth of emerging brokers through its Black Stock Broker Programme, which also demonstrates the bourse’s commitment to the transformation of SA’s capital markets. The JSE provided financial assistance to black stockbrokers in the form of cash disbursements equal to 33% of quarterly equity trading fees, and paid their membership fees to ensure their sustainability.

This initiative also formed part of the exchange’s strategy to support implementation of the Financial Sector Charter, which provides guidelines and prescripts for the application of broad-based BEE in the financial services sector.

With less than a decade to go it is important that we accelerate the creation of new businesses, particularly technology-driven companies, to hit the NDP’s golden target of 11-million jobs by 2030, 90% of them generated by SMMEs. The JSE will continue to play its part to support this vision to see these smaller players soar.

• Reddy is director for capital markets and Lee director for marketing & corporate affairs, at the JSE.