A 2020 study by the Organisation for Economic Co-operation and Development (OECD) revealed that only 30% of South African adults are considered financially literate. Financial literacy encompasses a range of skills, including personal financial management, budgeting, investing, borrowing, and understanding critical economic concepts like interest rates, inflation, and retirement planning.
Recognising the urgent need to enhance financial literacy, particularly among small business owners, students, and academics, the University of the Western Cape (UWC) has offered workshops at its Small Business Clinic from July to September 2024. These workshops aim to equip participants with essential financial skills and knowledge and are facilitated by academics from UWC’s Department of Finance in the Faculty of Economic and Management Sciences.
The workshops cover critical topics designed to benefit small business owners:
Sources of Financing for Small Businesses:
Dr. Chipo Mlambo and Mr. Xolisa Mtiki discussed the various types of financing available to small businesses, including formal and informal financing, equity versus debt, and asset-based financing. Understanding the pros and cons of each option is crucial for sustainable business growth.
Access to Finance:
Dr. Mlambo highlighted the importance of access to finance throughout a business’s life cycle. She explained how businesses can make informed financing choices depending on their stage of development.
Painting Your Business’s Financial Picture:
Mr. Colin Priem guided participants through creating and presenting a comprehensive financial picture, essential for attracting investors and securing funding. The workshop provided insights into assessing a business’s economic health using management accounts and cash flow analysis.
Securing Finance for Your Business:
Dr. Tita and Dr. Mlambo co-presented strategies for securing finance, and addressing challenges like limited collateral and the complexities of South Africa’s financial landscape.
Small Business Clinic Coordinator Lisle Svenson emphasised the workshops’ practical focus: “The workshops provide participants with an opportunity to learn and engage with real issues regarding accessing and managing finance. This includes financial management tools that can assist small business owners in better managing their finances in a tough trading environment, helping them grow into viable, sustainable businesses.”
Svenson further highlighted the financial knowledge gap in marginalised communities, noting, “Most people do not understand key financial concepts like inflation, interest rates and long-term financial planning. This deficit is even more glaring in marginalised communities, where access to financial education and resources is limited. Many small business owners in these communities struggle to secure funding, manage cash flow and understand financial risks.”
Elsies River Bakery owner and workshop participant Zaahira Davids shared how the workshop helped her gain crucial insights: “The workshop provided valuable knowledge on how to ensure my business is developing in income and expenditure and how to manage cash flow effectively.”
Avuyile Maseko from Kraaifontein, owner of a traditional clothing store and website designer, also found the workshops enlightening: “I learned about the different types of funding available for my business depending on its stage of development. The workshop also taught me the importance of maintaining an accounting system to track expenses and income. I now understand how to maintain equity and what funders or banks look at when you apply for funding. Learning how to create balance sheets and profit and loss statements was incredibly valuable, and understanding how to account for different departments or income lines has helped me immensely.”
By closing the financial literacy gap, we can foster a more financially inclusive economy – one where small businesses thrive and individuals have the knowledge and tools to secure their financial futures.
Source Social Tv: https://social-tv.co.za/education-and-training/uwc-empowers-entrepreneurs-with-financial-literacy-workshops-to-bridge-knowledge-gap-in-south-africa/
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