In his study, Teboho Nthoana said he has proposed a couple of things like establishing a township specific financial institution or funding programmes with micro-investment ecosystem that consists of a couple of elements that collectively support township entrepreneurs. Photograph :Phando Jikelo/African News Agency (ANA)
Award-winning entrepreneur Teboho Nthoana has said that the township economy was a misunderstood concept, adding that there were a lot of things that people were missing when it comes to the township market and economy on its own.
Speaking at the PSG Think Big Seminar yesterday, Nthoana said one of the things Statistics South Africa released in 2020 was the size of the township economy, which was worth R400 billion then.
“That on its own speaks to the informal sector, which contributes about 28% to the GDP of the country according to the South African Reserve Bank,” Nthoana said.
“So that on its own goes to show the township market retail size of R120bn. That shows there is untapped potential that can be taken advantage of. One of the things that stood out when I did the study is we know that in the country there is a lot of employment challenges.
“From that point of view, the township economy employs about 3.5 million people, according to research by Stats SA. That goes to show that there is a huge market that can be tapped and taken advantage of. If it can be understood, we could see better results.”
In his study, Nthoana proposed a couple of things like establishing a township specific financial institution or funding programmes with micro-investment ecosystem that collectively supports township entrepreneurs.
“I have mentioned things like crowdfunding platforms that can be taken advantage of like peer-to-peer lending and mainly venture capital funds going into the township to actually invest in some of the businesses there,” he said.
“With certain communities, we even went to an extent of identifying community-based investment funds [in which] a collective people were coming together pooling resources to invest small amounts of funds that could really grow businesses.”
As a township entrepreneur with an MBA from Regenesys Business School and currently pursuing his PhD, Nthoana brought a deep understanding of the challenges small businesses face. He is committed to using his experience to inspire others and champion inclusive economic growth.
Nthoana said the sector could better explore micro-finance institutions that could really partner with township entrepreneurs to be able to give them micro-loans or service accounts, or any other products that could be of benefit to them.
He said that spoke to public-private partnerships that, if taken advantage of, could actually be the first basis to start. He said the country must acknowledged entrepreneurs.
“It seems if you are a township entrepreneur you are really unemployed and doing nothing. Therefore, there are things like surety that becomes a problem to produce,” Nthoana said.
“Even some documentation like record-keeping for some of the transactions that take place in the township because those are not well-recorded. Those leave a room for township entrepreneurs to be disadvantaged. Therefore, I think to trying to formalise that is one of the key things to set up. We are trying to look at the solutions like that.”
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