Disruptive finance: How ProfitShare Partners boosts SME opportunities
“The bedrock on which ProfitShare Partners (PSP) is founded on is inclusivity,” says Andrew Maren, CEO and founder of the company working with SMEs to effect growth and success in a sector largely shut out by traditional banking processes.
“Our function is to provide capital for SMEs often seen as ‘non-bankable’ and therefore excluded from what PSP sees as a R30-billion a month market.”
Given the chance, many SMEs could see sustainable growth from orders for various products and services required by corporates. “Unfortunately,” says Maren, “traditional banks require 12 months’ of banking statements and a number of other obstacles for an SME to overcome, including a long wait between application for funding and final approval.”
This is where ProfitShare Partners shines. When an SME gets an order from a corporate, they provide the data to PSP on the company’s website, and will receive an answer within 24 hours.
“If approved, the process takes seven days from online application to payout,” Maren notes. “We see this kind of efficiency and solution as the democratisation of finance. PSP is not in competition with any banks, but is the ‘pre-school’ of finance that leads us to introduce our clients to a traditional banking institution once we’ve helped them onto the finance ladder.”
The heart of the innopreneur
As fintech continues to grow and disrupt the financial sector, Maren is that rare combination of innovator and entrepreneur – the “innopreneur” who is building clients to “lose them” to the traditional banks.
“We are smaller and more agile than the big banks are allowed to be. We use that flexibility and speed to ensure an SME’s order is met and their cashflow starts coming in. Once they’re bankable, we’ve done our job.”
Initially, Maren asserts, there was much scepticism from banks and SMEs. “We heard ‘it won’t work’ so often some may have believed it. I knew we had to have a thick skin and stick to what we could see would work. Even while it was still a vision, we were confident that our commitment to SMEs would eventually be met by understanding by the large financial institutions.
“Today,” he says, “we have the very same large institutions calling us, as they realise we are not really a competitor but we are actually growing the base of bankable clients where they effectively benefit from”
Initiatives that create change
To ensure SMEs had a fighting chance, ProfitShare Partners, together with radio station Hot 91.9FM and business app getlion, created the #GetSAWorking campaign, providing R100-million in capital to qualified applicants and offering the chance to one SME of winning R1-million.
“Half way through this year-long initiative, we have funded small businesses to the tune of over R50-million so far,” says Maren.
Maren believes it is programmes like this that make it possible for the small operators to take advantage of large opportunities, and grow. “This growth sees small companies able to employ more people, keep cashflow going and eventually reach their full potential.”
In a business arena of inclusivity, ProfitShare Partners sees the “small fish” being a huge part of the economic backbone of South Africa. “With this kind of participation, the road to recovery from challenges that include Covid-19 is one that now holds promise,” Maren concludes.
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