Approach to Enterprise Support is Failing Africa’s SMEs
Despite providing immense financial support for the economy, SMEs still face a multitude of challenges and lack support. According to the article, 72 percent of all startup funding went into only three companies in the region (Africa) in the span of two recent years.
Supply and demand are the causes inhibiting SMEs’ access to support. On the supply side, investors, banks and financial institutions are leery in providing capital before the post-revenue stage. On the demand side, entrepreneurs are not creating bankable or investable business models.
Additionally, the process for fundraising in the region takes an extended period of time, according to the article, about three to six months.
Corrective measures such as: angel investors, early-stage capital and incubation support are detailed, along with their results in mitigating challenges faced by SMEs.