Hloolo Project Connects South African Green SMEs with Financial Opportunities to Address Financing Gaps

South African green small and medium enterprises (SMEs) face considerable obstacles in securing sustainable financing, despite the country’s well-established financial sector. These early-stage and emerging businesses find it challenging to obtain necessary funding, with high costs from non-banking financial institutions adding to their difficulties. In addition to expensive capital, these SMEs also grapple with information gaps and preparation challenges for investment opportunities.

In an effort to address these issues, Nedbank has launched The Nedbank Green Economy Fund, aiming to finance up to 100 startups in sectors aligned with its Green Economy Strategy and the United Nations' Sustainable Development Goals (SDGs). However, this funding gap is not limited to South Africa. A report from the OECD, titled 'Financing SMEs for Sustainability: Drivers, Constraints and Policies,' indicates that green SMEs worldwide often struggle to access sustainability-linked finance due to their limited capacity to provide essential sustainability performance data, such as Environmental, Social, and Governance (ESG) assessments. The report advocates for stakeholders to offer non-financial support to help these SMEs achieve net-zero goals and overcome knowledge and capacity constraints.

The recent launch of Hloolo, a project by Fetola in collaboration with Nedbank, JP Morgan Chase, and the Embassy of Finland, marks the latest phase of the Circular Economy Accelerator (CEA). This multi-year initiative is designed to foster a robust circular economy ecosystem in South Africa, with Hloolo focusing on connecting green businesses with financial and market opportunities.

Source: Joel Omulo / TheFounder