Macsteel is putting its money where its mouth is, committing to pay SME suppliers within 30 days in a bid to contribute to the sustainability and growth of this critical sector of the South African economy. South Africa’s largest steel merchant has joined Business for South Africa’s (B4SA) #PayIn30 campaign.
Building a business into a sustainable enterprise comes with numerous challenges, something Macsteel, which has been in business for more than 116 years understands all too well. Even large corporates continue to face sustainability hurdles daily, never mind the plight that small and medium enterprises (SMEs) confront, especially when it comes to liquidity.
One of the biggest reasons small business fail is simply running out of money. Cash-flow remains a life-line for SMEs to not only meet their commitments at the end of the month, but get into a position where they are able to grow. And with over 2.25m SMEs in South Africa accounting for nearly 11m jobs, Macsteel is committing to play its part in easing their financial pressures and opening that opportunity for growth.
“We understand the key pressures facing SMEs prior to the pandemic and appreciate that these have been further exacerbated by the impact of COVID-19,” says Mike Benfield, CEO of Macsteel. “Macsteel has always focused on strengthening the position of SMEs in the steel industry and believe they are key drivers of commercial development and job creation. SMEs can be the backbones of any economy and the main driver of economic growth, with the potential to create and expand employment opportunities, develop entrepreneurial skills and enhance market opportunities.”
Understanding the considerable strain placed on SMEs by late payments, Macsteel has joined approximately 60 other large corporates to pledge their commitment to the B4SA Pay SMEs in 30 Days campaign ensuring the sustainability of small to medium businesses.
“We are invested in this initiative, together with big business, so we can enable small businesses to thrive and grow into profitable enterprises and I encourage all CEOs to get involved in this initiative and help unlock the potential of our SMEs,” said Benfield.
The #PayIn30 initiative was born from members of Business for South Africa (B4SA) alliance, including the South African Small and Medium Enterprise Fund (SA SME Fund), Business Leadership South Africa (BLSA), Business Unity South Africa (BUSA), Black Business Council (BBC) and the Small Business Initiative who have, for some time, been seized with the challenges facing SMEs, specifically those resulting from the COVID-19 pandemic.
After numerous discussions with SMEs, SME champions, and the corporate sector, these organisations identified that access to working capital and cash flow is the most significant headwind facing SMEs. Collectively, these organisations devised a programme encouraging large corporates to commit to paying their SMEs within 30 days. The response from Corporate SA has been overwhelmingly supportive, and by mid-November, over 60 corporates showed support and publicly committed to the initiative.
The primary objective of this initiative is to ensure the sustainability of SMEs and the employees they support, establishing a culture of early payment of SME invoices across the board. There are plans to expand on the initiative to include a Payment Composite Index to report on progress and build a system of accountability.