That’s according to Nikki Kearns, director of business banking at Standard Bank, one of the sponsors of the 2005 Global Entrepreneurship Monitor Report (GEM).

Conducted by the University of Cape Town’s Graduate School of Business, the GEM Report provides empirical data on the level of entrepreneurship in developing nations which is intended to stimulate debate and inform policy.

“GEM 2005 indicates that South Africa’s level of entrepreneurial activity has decreased since the 2004 survey; however, as the effects of broad based black economic empowerment legislation take place in this country, it is my view that as the level of people entering the formal economy – as well as gaining access to banking systems – increases, more people will be in a position to exercise their business creativity than was previously possible,” says Kearns.

Kearns notes that access to capital is key for the aspiring businessperson – banks look at sustainable businesses, cash flow, management experience and collateral. Standard Bank is introducing solutions such as contract finance, in the form of acquisition and expansion capital, for BEE businesses to bridge the gap where experience and collateral has yet to be created by the business.

However, with the introduction of the BEE Financial Sector Charter in 2003, certain provisions and responsibilities have been set out for financial institutions to contribute to the redress of past economic imbalances. While many of these responsibilities focus on an increase in the executive-level participation of the previously disadvantaged, Kearns believes it is the combination of certain measures that will contribute to improved entrepreneurship, such as requirements for skills development, corporate social investment – and notably, the introduction of an initiative to extend bank services to more South Africans.

“ At Standard Bank we realise that we have a far greater responsibility than just rising to our BEE challenges. What is required to succeed is a true understanding of the BEE objectives – its significance for our country’s future economic success, and the challenges it poses for many sectors of society, especially business entrepreneurs,” says Kearns.

“BEE should be seen as a benefit to the economy and business in South Africa. BEE enables economic growth and by bringing on an empowerment partner will give businesses access to new markets, which in turn will lead to business growth. It is an economic imperative – thus by completing a BEE transaction you ensure sustainability for your business.”

“Many SMEs today are awarded contracts, but are unable to access finance due to a lack of security and/or equity. The findings of the SME Survey 2005 once again confirmed that access to expertise and finance are the ‘diamond duo’ of small business success. We do not only provide empowerment finance for SMEs, but we offer clients a complete solution. Clients are given a tax-efficient structure to facilitate the funding, purchasing and sale of equity or shares in a business. We also give our clients access to all the relevant legal documents to facilitate an equity transaction,” she adds.

Furthermore, with the GEM Report indicating a clear correlation between education and entrepreneurial activity, Kearns believes it is important to encourage skills development. “ Standard Bank clients receive training on BEE fundamentals as well as have access to educational mentoring programmes to acquire the necessary skills to run a successful business. “By transferring skills and opportunities, one ensures that there are a growing number of ownership opportunities. We have regular BEE forums where we invite our clients from all provinces to attend and participate in discussions where we educate them on issues such as the BEE scorecard,” says Kearns.

“Large companies are taking the legislation seriously, and it is having an impact across all levels of society; while it will take some time, it is plausible that as the effects take hold, BEE will act as a catalyst to help to stimulate further entrepreneurial activity in this country.”

Ends