Barry Streek
Far from shunning small and medium enterprises in the fishing industry as most other finance houses have done until now, Business Partners established after the demise of the Small Business Development Corporation (SBDC) has continued to support them.
Business Partners, which is 80% owned by the private sector and 20% by the government, has provided about R70-million to small and medium enterprises in the fishing industry.
“There was such a huge gap in the market and no one was financing the industry. We really have played our role,” said area manager Anton Roelofse.
Business Partners has two products on the market. One is in a sense risk-free because loans are given to people who provide security. This is about 20% of the business.
The rest involves risk because it takes equity in the company with the provision that the entrepreneur could buy them out when he or she was in a position to do so.
“In the small and medium sector we have been the leader in the industry,” said Roelofse.
He said he understood that the Industrial Development Corporation was considering reentering this sector but one of the major problems was that there were no long-term rights in fishing until now and investors were reluctant to expose themselves in such a risky market.
“Historically, we had a huge white book because of the old system, but from the new money, R50-million of the R70-million has involved transformed companies. At least 70% of our new deals go to transformed companies. It is really a business decision to go into transformed companies that is where the rights are. It is a logical way to go.”
Business Partners’ exposure to fishing companies ranges from R150 000 to R15-million, but the average is R1,5-million.
“Everyone in fishing on the smaller side is one of my clients,” Roelofse says. Among them are Ensemble Trading 201, trading as Ruwekus and based in Port Elizabeth, which has a south coast rock lobster quota, Sentrawl, based in Hout Bay, which is involved in the hake industry, and Noordkaap Vissermans Onderneming, a deep-sea undertaking in Port Nolloth.
When the Fisheries Development Corporation (Viskor) was disbanded, the SBDC took over its financing arm, including the fishing fund, which it managed on behalf of the government. When the SBDC was dissolved, its private sector partners bought 30% from the government, giving them 80% of Business Partners.
In the process, some of the funds that were administered by the SBDC went back to the government, including the fishing fund which disappeared, but Business Partners retained the book of debtors, said Roelofse.