Absa Group’s Enterprise Development unit has taken a step into the retail sector by partnering with wholesalers Masscash to provide funding for Masscash’s growing retail outlets.
Masscash, which is a cash ‘n carry wholesaler that forms part of the Massmart/Walmart Group, is diversifying and moving into the retail sector by aggressively expanding into the township areas of South Africa using its own retail brand called “Fairpriced”.
Commenting on the deal, Absa Retail and Business Banking head for Enterprise Development Sisa Ntshona said he was excited that the agreement, which had taken many months to put together, had finally come to fruition.
“As Absa we have always said creating an environment that would enable the growth and development of sustainable small enterprises is one of the methods in resolving the poverty and unemployment challenges our country faces,” he said.
“That is why Absa in its efforts to assist with the development of entrepreneurs has teamed up with Masscash/Walmart. We will initially assist with the funding of a targeted number of Fair Priced stores with the option to extend the programme to all of the planned 2500 stores over the next 2 to 3 years,’ he said.
Absa will not only provide funding for the refurbishment of existing outlets or the building of new stores and with the option to provide working capital funding, but also provide access to products that include deposits, Point of Sale devices – POS and ATM machines.
Among other strategic partners involved in this project is USAID who will also provide assistance to the entrepreneurs alongside Absa.
Masscash’s Business Development Manager: AJ Bruwer said Masscash would identify suitable (previously disadvantaged) entrepreneurs to become the owners of these stores. “These stores will either be built from scratch or existing ones will be refurbished. Ideally the owner must live on the business premises.”
He said in order to ensure these stores were sustainable Masscash had identified other business partners including Builder’s Warehouse – to provide all of the required materials to build or refurbish a store; the University of Pretoria – to assist in training all entrepreneurs on the managing of stores and National Integration Solutions Services – to assist the entrepreneurs on a daily basis.
Bruwer said Fairpriced Outlets will be the vehicle to drive the Informal market into the future by using strategic partners experience and expertise. With the target to open 2500 of these stores over the next 2/3 years nationally. “We want to own the retail township space,” he said.