South Africans’ famed resilience has truly been put to the test over the last two years, between COVID-19, electricity shortages, unrest, increase in fuel prices, interest rate hikes and climate disasters. The country has been through so much – but its entrepreneurs are simply not giving up, seeking opportunity in adversity to become the drivers of economic opportunity and job creation.
The banking sector is seeing increased interactions and deal flows that clearly point towards a recovery, with rebounding businesses once again looking to scale. However, looking at their performance on ‘paper’ – impacted by the pandemic roller coaster and other incidents – may make large financial institutions with little appetite for risk cautious to engage.
There’s a massive opportunity for a bank with an adjusted risk appetite to develop creative funding structures for sectors that are responding directly to economic and sociopolitical events. For example, there are multiple investment opportunities emerging as a result of the country’s current energy crisis, with off-grid renewable energy solutions mushrooming in the metaphorical – and literal – darkness.
“Rebounding businesses need committed and creative investment and funding partners, rather than being forced to limit their vision for growth by financial institutions with fixed mindsets,” says Andile Hote, Head of Commercial Banking at Sasfin. “Helping entrepreneurs to realise their dreams at each new starting point in their journey, knowing that there’s a bigger picture at play, is about so much more than being their banking partner – it’s about the whole ecosystem and its potential to facilitate positive impact on society.”
It’s the notion of new starting points that has driven Hote since he was a young boy in boarding school, where he was inspired to change the narrative of what it meant to grow up in an Eastern Cape township and be a role model for the children around him.
“I believe if you want anything badly enough, that nothing is impossible – you find a way to make it happen,” he says. “That’s true in various different parts of life – but it’s particularly true in business and in banking, and I bring this philosophy to every deal that we work on at Sasfin.
“Every person in business – whether it’s my colleagues in the bank or the clients that we deal with – has the potential to make a bigger impact in what we wake up to every day. Playing a part in supporting entrepreneurs’ dreams, in nurturing their genius, is our mark of success.”
Intent on growing businesses seeking investment of a deal size of R30 million to R100 million, Hote believes that there is a void left by bigger banks for finance opportunities that seek a forward-looking approach and creative funding structures, with a single point of contact who has a true interest in the client’s success.
“Every deal needs to be evaluated on its own merits – just as South Africa is so diverse, so are its entrepreneurs in their ideas, approaches, and visions for future success,” Hote says. “That’s why they need a commercial finance partner that also has an entrepreneurial approach, that is small enough to remember what it’s like to be a family business, but experienced enough to be able to find creative ways of solving challenges and creating solutions.”
This approach to commercial relationships also lends itself to personalisation, with banks financing deals in the R30 million to R100 million bracket able to take the time to understand the essence of the businesses they’re working with – while in the case of Sasfin, still offering a differentiated skillset that’s synonymous with investment and corporate banking, corporate finance, and a single point of contact.
“Working with entrepreneurs at their ongoing starting points along their business journeys needs a solutions-based mindset, that’s more about how we can make the deal work by deeply evaluating the risk profile, rather than walking away from the deal because it doesn’t fit into a tick box list,” Hote says.
Having started his career in banking as a teller armed with a degree in economics and mathematical statistics, Hote has walked a long journey from rural Eastern Cape, working in the country’s leading financial institutions. His enthusiasm and optimism has led his collaborations along that journey, with a determination to always go beyond the deal to identify real opportunity and value.
“Knowing that my work supports entrepreneurs, the South African economy, and job creation leads my approach to every deal we do at Sasfin,” he says. I come from those values – I know what they mean to our clients.”