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FNB offers entrepreneurs free business banking, learning hub

With the SME sector touted as a prime forum for job creation and economic growth, banks are starting to tune in to the opportunities it offers.

Emerging entrepreneurs can expand their business knowledge and access cheaper business banking through two new initiatives launched by First National Bank this week.

FNB Business CEO Mike Vacy-Lyle says the education platform Fundaba and the First Business Zero bank account are two ways in which the bank is leveraging its benefits of scale to give back to the community and empower start-up businesses.

Pocket mentor to boost business knowledge

Fundaba, which could also be referred to as a pocket mentor, is available via the FNB app to all its clients and offers a free interactive learning experience, encompassing multimedia content such as videos, podcasts, quizzes and templates. As a user progresses through the learning experience, they unlock access to business tools such as a business plan template. Content ranges from incubating a business idea to starting, running and growing a business in South Africa.

Jesse Weinberg, head of the SME (small and medium-sized enterprises) customer segment at FNB, explains that the Fundaba educational programme consists of 12 modules across four lifecycle stages of a business (incubate, start, run and grow) and follows a South African entrepreneur’s journey as he builds his first business – ‘Lebo’s Bakery’. All audio and video content is available in isiZulu, isiXhosa, Sesotho, English and Afrikaans.

Read: What it takes to be a millennial entrepreneur

SME lending on the rise

The Assessment of South Africa’s SME Landscape: Challenges, Opportunities, Risks and Next Steps’ 2018/2019 report, published last year, showed that access to funding remains a major stumbling block for SMEs. Only 6% of SME owners indicated that they had received funding from the government, with the top three sources of funding being government grants (21%), the Department of Trade and Industry (17%) and the National Youth Development Agency (16%).

Of the 1 157 SME owners surveyed, 33% indicated that they had been refused funding.

Reasons included insufficient operating history, inadequate cash flow and limited collateral.

However, banks are waking up to the potential growth opportunity that the SME sector offers and are starting to rise to the unique challenges faced by this sector.

During the year to June 2019, FNB Business Banking’s SME lending reached more than R40 billion. The bank further extended more than R8 billion to women-led businesses in the year. Vacy-Lyle says better use of data, understanding client context, easier credit applications through scoring and digitisation, as well as lower origination costs, have led to better, deeper credit underwriting and quicker turnaround times.

Read: How SMEs can bulletproof themselves against the downturn in the economy

Newer banks are also actively pursuing opportunities in this sector, with Tyme Bank revealing that it will launch a small business banking offering next year, while Capitec recently bought Mercantile Bank in a move that is expected to boost its business banking offering. Nedbank recently introduced a small business functionality that allows clients with both a business and personal banking profile to switch seamlessly between their profiles, behind a single log-in. From November, business owners will also be able to share their Nedbank business profile with additional users (such as their business partners), eliminating the risky behaviour of password sharing.

First Business Zero

First Business Zero is a digital platform business bank account that will be offered by FNB from November 1. The offering is designed specifically for sole proprietor businesses with an annual turnover up to R5 million.

Key features of First Business Zero:

  • No monthly account fee
  • Unlimited free point-of-sale card swipes
  • An interoperable QR code for accepting payments
  • A linked saving pocket to ringfence savings and earn interest, and
  • An FNB Connect SIM card that includes free data, minutes and SMSs (up to 100MB data, 30 voice minutes and 30 SMSs).

Businesses making use of First Business Zero also get free access to value-added services, including FNB’s Instant Accounting, Instant Invoicing, Instant Cash Flow and Instant Payroll software.

Read: Micro-enterprises to get a boost from changes to procurement rules

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