In a bid to strengthen the Small, Medium, and Micro Enterprises (SMME) landscape in host communities, Thungela and Absa have penned a R200 million co-funding agreement which will afford SMMEs t heempowerment they need to reach new heights.
In what is seen as a major flip for South African Small, Medium, and Micro Enterprises (SMMEs), Thungela’s Enterprise and Supplier Development (ESD) programme, Thuthukani, has announced the signing of a co-funding agreement with Absa, one of South Africa’s foremost financial services providers.
The agreement, which was signed on 30 May 2024, will see Absa reserve R200 million in capital (reviewable on an annual basis) for Thuthukani beneficiaries using their new or current contracts with Thungela as collateral.
The Thuthukani programme, which derives its name from the isiZulu word for ‘uplift’, is focused on cultivating and growing local businesses through the provision of business skills training and coaching, access to funding, and technical enablement. Speaking following the signing of the agreement with Absa, Executive Head for Corporate Affairs at Thungela, Mpumi Sithole, revealed her delight at the strides being made in the support of SMMEs in the communities that host the company’s operations.
“I am pleased that our partnership with Absa will make funding more accessible for local SMMEs with new and existing contracts with us,” Sithole says.
“In 2023, Thuthukani disbursed R21.6 million in loans, leading to the creation of 114 jobs. Larger contracts require substantial funding that Thuthukani alone could not provide. This partnership with Absa will close this funding gap for SMMEs, opening opportunities for them to pursue larger projects.” Kgalaletso Tlhoaele, the Executive for Enterprise Development at Absa Relationship Banking, echoes the Sithole’s sentiments and adds that a lot of good is set to come from this new partnership.
“This agreement highlights Absa’s dedication to enabling financial inclusion for SMMEs while also fostering sustainable economic growth across various sectors,” Tlhoaele explains.
“The allocation aims to provide substantial financial support that empowers SMMEs to expand, innovate, and achieve long-term sustainability.
“It also enables us to achieve our goal to improving access to income generation opportunities and to reduce reliance on the mine by strengthening the local SMME sector.”
As part of the agreement, Absa will manage the full loan application process on their ESD portal, subject to a recommendation from Thuthukani.
The portal plays a critical role in ensuring funds are accessible to the approved beneficiaries, offering loans at a prime-linked interest rate.
This partnership targets SMMEs in municipalities hosting Thungela’s operations such as eMalahleni, Steve Tshwete, and Govan Mbeki Municipalities in Mpumalanga. Interested SMME owners strictly from the Govan Mbeki, Gert Sibande and Nkangala districts and can submit their applications for funding directly to the Thuthukani SED team, via email, th********@th******.com.
