Impactful change and transformation require collective, practical action

Linda Makalima, Nedbank Board Member and Chairperson of the Nedbank Group Transformation, Social and Ethics Committee

It is every country’s goal to achieve continuous and consistent socioeconomic development for the well-being of the community, businesses, and society at large. While focus is largely on government to enable an environment conducive to development through favourable economic and social policies, there is a strong expectation that the private sector should be an active participant in driving transformation and contributing to the betterment of society. With Nedbank’s purpose being to use its financial expertise to do good for individuals, families, businesses and society in mind, we spoke to Linda Makalima, Nedbank Board Member and Chairperson of the Nedbank Group Transformation, Social and Ethics Committee, about how the bank is living its purpose by providing practical solutions for impactful change in the country. 

Q: Finance institutions play an important role in creating sustainable development in communities. What approach has Nedbank taken to advance socioeconomic empowerment?

A: With the many challenges in our country in mind (from climate change to access to clean water and sanitation and financial exclusion) we prioritised nine of the 17 United National Sustainable Development Goals where we believe we have the greatest ability to deliver meaningful impact through innovation in our banking products as well as lending and investment practices.

These SDGs include affordable and clean energy, clean water and sanitation, sustainable cities and communities and climate action, to name a few. 

We understand that banks play a crucial role in facilitating economic activity and enabling sustainable growth and development as we have the expertise and resources.  We examined the challenges faced by our communities which include a lack of jobs, lack of funding and resources and lack of essential skills and proposed practical, accessible, and sustainable solutions to address them. These solutions include the development of programmes that support emerging enterprises and provide small, micro, and medium enterprises (SMMEs) with access to markets and growth opportunities, transforming our supply chain and working to uplift communities through our CSI initiatives.

Q: When we look at the challenges communities face, we note that the burden of unemployment is concentrated amongst the youth – with 65% of youth being unemployed. Have we identified a solution for this?

A: There is consensus between government and the private sector on the need for urgent and collaborative interventions to reduce the youth unemployment crisis that the country is currently experiencing. Nedbank has made strides in addressing this through initiatives such as the Youth Employment Services (YES) programme, a government-led initiative, which seeks to address youth unemployment. To date, the Nedbank programme has given over 5000 graduates an opportunity to develop critical skills that will allow them to find sustainable employment. 

Nedbank is leading within the Financial Sector with a total of 7080 youth participation in the last 4 years (including the 2022 intake).

The first year’s intake of youth were, in the most part, qualified university graduates who were of such a high calibre that Nedbank’s absorption rate of this cohort into permanent roles or continued contract employment was much higher than the prescribed requirement, and exceeded all of our expectations.  Our overall absorption rate, inclusive of our implementation partners, was 20% – eight times over Gazetted target of 2.5%.

In 2021, more than 1 900 youth entered Nedbank’s YES programme. Of this, Nedbank hosted 150 of these young people into the programme who aligned with our focus on addressing future critical capabilities.  The balance of the intake was spread amongst our implementation partners WILDTRUST, ORT SA, Youth@work, Conservation SA, and R’Labs. 

With Nedbank embracing the value that the programme provides for both the company and young people, 103 of the 150 youth hosted by Nedbank in 2021 were offered formal employment – a staggering 67% absorption rate into life-changing career opportunities. 

For the 2022 intake, more than 2000 youth have entered the year-long YES programme to date. In this intake, Nedbank is hosting more than 600 candidates into its own clusters – a substantial increase on 2021 with the balance being placed with suitable implementation partners. 

Q: In reference to the need for sustainable employment – how can the private sector support individuals who create their own employment through SMMEs? 

A: I truly believe that SMMEs can thrive when they are provided with the opportunity to develop their skills and given access to promote their products and services in markets where they are needed. As the private sector, we have the resources and networks to facilitate this. The role that SMMEs have to play in the creation of much-needed employment opportunities requires the provision of business support, including access to funding and markets, has never been more critical. 

At Nedbank, we embrace our responsibility to contribute towards economic growth and job creation. Some of the ways we do this include supporting emerging enterprises; providing small, micro, and medium enterprises (SMMEs) with access to markets and growth opportunities; transforming our supply chain; and working to uplift the communities in which we operate. Nedbank’s policies and practices in preferential procurement remain a key strategy for enabling transformation, job creation and community upliftment. They are designed to maximise the group’s contribution to the development and economic transformation of the country, by giving preference to local suppliers over foreign suppliers, with emphasis on SMMEs.

As part of this focus, Nedbank entered into a strategic partnership with SAP Ariba to empower and develop small black-owned suppliers. Selected suppliers received a standard Nedbank business account, which gives them access to the Ariba platform to market their businesses and participate in the sourcing opportunities it provides.

Nedbank remains a signatory to the Prompt Payment Code, which means that smaller suppliers (exempted microenterprises) are paid within seven days, and all other SMEs within 30 days of receiving their invoices. This gives SMEs quicker access to their funds to help them remain operationally viable.

We’ve also supported various Enterprise Development initiatives over and above our Enterprise Supplier Development programme, to contribute to the growth and sustainability of SMMEs. These include but not limited to: 

R’Labs 

Nedbank provided RLabs with R3,6m to implement the Innovation and Enterprise Programme (IEP) with entrepreneurs from peri-urban, township and other marginalised communities across Cape Town. The IEP provides a variety of leadership, entrepreneurship, design, incubation, technology, and innovation programmes offering support, advisory services, resources, mentorship and incubation to women and youth-led ventures.

AWIEF Business Growth Accelerator – 

Nedbank provided R2,6m to the African Women Innovation and Entrepreneurship Fund Growth Accelerator (AWIEF) to support 50 women-owned businesses across SA. The accelerator programme is designed to suit the unique needs of early-stage and high-growth-oriented enterprises with business modelling and growth strategy training, business leadership skills, corporate advisory, mentoring, coaching, networks, and orchestrating strategic partnerships.

The Riversands Incubation Hub 

The Riversands Incubation Hub is a large-scale black-business incubator. A registered non-profit company, the hub was established in 2014 through a partnership between Century Property Developments and The Jobs Fund, with the purpose of incubating businesses for growth and expansion so that they can become sustainable, job-creating entities. The hub also offers rental premises for businesses at subsidised rates. 

Nedbank provided R2,9m to enable 60 businesses to receive support from the hub A total of R64,4m in revenue was generated in 2021, and the businesses paid a total of R1,9m in salaries. A total of 139 jobs were created in the year under review.

Fix Forward 

Fix Forward is an incubation programme focusing on equipping tradespersons from low-income communities with the necessary skills and to transition them from the informal to the formal arena. The objective of the programme is to empower the tradesmen to realise their potential as entrepreneurs, and to help them grow successful businesses. 

Nedbank provided R3,5m for 100 contractors to participate in Fix Forward’s 12-month Enterprise Development Programme. Over and above the 100 contractors supported through the workshops, coaching and mentoring, a further 67 contractors were afforded increased access to markets.

In 2021 these businesses created 116 permanent jobs and 71 temporary jobs. The contractors earned over R8,5m in revenue.

Q: Does Corporate Social Investment play a role in socioeconomic empowerment?

A:  CSI initiatives must improve the economic ecosystem and the community’s skills set to enable people to gain employment or start their own enterprises. In 2021, Nedbank revised their CSI strategy to ensure that the initiatives we get involved in grow our socioeconomic impact. Our revised CSI strategy invests in the green economy and focuses on four key areas that are critical to both the economy and the wellbeing of communities: agriculture, water, energy, and waste. By linking our traditional CSI focus areas of education and skills development to the four key elements of the green economy, we envisage a refreshed approach to job creation and enterprise development that will help to drive socioeconomic empowerment in communities.  

In terms of the green economy, one of the projects we have invested in is the Siyavuna Abalimi Development Centre (SDC). The centre, located in the south of KwaZulu-Natal, is implementing a Bulbine frutescens farming project. The project aims to grow Bulbine as a raw material input into the skin and cosmetic industry and has already secured an offtaker for their produce. The funding from the Nedbank Foundation has enabled SDC to secure five hectares of land for production, purchase Bulbine seedlings, and train SDC employees, youth and farmers on all aspects of Bulbine production. A three-hectare section of the land was planted in 2021 and 17 smallholder farmers and six youth were employed to work on the farm, bolstering local employment and knowledge. 

Q: In closing, what would you say to other organisations regarding the drive to grow our country’s socioeconomical capital? 

A: There is an African proverb that says, “If you want to go far, go together.” Transformation, inclusive growth and socioeconomical development cannot be the responsibility of government or that of one single company. We all need to cumulatively put in our energies, resources, talents, and skills for the upliftment of our communities.

The reality is that the challenges and problems of the world, and the threat to the future sustainability of our environment are too colossal for governments and only a set number of companies to tackle on their own.