Performance of enterprise development funds backed by financial institutions in South Africa : lessons learnt in impact investing

Abstract

Enterprise Development (ED) is a worldwide concept which refers to the development of Enterprises. ED in SA includes the provision of financial and non-financial support to SMEs. The purpose of this research study is to gain an in-depth understanding of the performance of Financial Institution ED in SA as it relates to Impact Investing, the main focus being the funding of SMEs in SA by Financial Institutions. The key to reducing unemployment and poverty globally is through the creation and sustainability of small businesses which require funding to grow and develop. The research scope covers Financial Institution ED Funding in SA which includes Commercial Banks, Development Finance Institutions, Insurance Companies, Fund Managers and Specialist Risk finance companies. Government alone cannot solve social problems and private capital from institutions needs to be playing a bigger role in solving social problems. This research study is exploratory and qualitative in nature. The focus of the study is to obtain in-depth insights from ED funders. Qualitative data was gathered during the research process by interviewing participants from eleven (11) Financial Institution ED Funds in SA.