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WP 34: Private equity and capitalization of SMMEs in South Africa: Quo vadis? - (pdf 95 Kb)
Ebony Consulting International Pty, Ltd, 2003, ILO.

In the rush to establish micro-credit institutions, the role of equity finance in establishing and sustaining businesses has been neglected. This paper looks at attempts in South Africa to close the equity gap for SMEs. It explores the causes, co-sequences and remedies of the equity gap. Very few of the 71 venture capital companies operate in the small equity market, i.e. below $10,000. The paper recommends that equity funds concentrate on business expansions, rather than start-ups, and seek links with institutions that specialise in business linkages.