Stanbic, Wilderness offer lifeline for SMMEs in tourism

The partnership, which was kick started when the two organisations signed a Memorandum of Understanding (MoU) recently, aims to address persistent challenges faced by local suppliers, especially around access to finance and market entry. Officials revealed the MoU establishes a guaranteed-access financing arrangement under which Stanbic will provide commercial loans to SMMEs that have secured supply contracts with, Wilderness, which is an eco-tourism company. It has been explained that the loans will be de-risked through projected cash flows from the contracts, eliminating the need for traditional forms of collateral such as property or equipment. “Our client here is Wilderness, and we’re leveraging their scale and financial strength to support SMMEs,” said Stanbic Bank CEO, Chose Modise. “The key factors are access and affordability areas where many small businesses typically face barriers.”

Wilderness will identify eligible SMMEs based on their capacity and potential, although the final approval rests with Stanbic after a formal credit assessment is made. However, the bank will not rely on fixed assets for security but will instead use expected income from Wilderness as the basis for the funding. “The difference is, instead of traditional collateral, we are using projected cash flows backed by Wilderness contracts. Because these payments will flow through us, we’re able to manage and mitigate the risk,” Modise added. Under the terms of the agreement, the selected SMMEs will cede their right to receive payments from Wilderness directly to Stanbic Bank.