Two of the biggest disruptors in South Africa came together in front of a packed house at Finance Indaba Africa 2017 on 12 October, when ZAR X CEO Etienne Nel, and globally renowned public speaker and MyGrowthFund venture capitalist Vusi Thembekwayo, discussed challenges facing the country economically and their organisations, which are shaking up the establishment.
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South Africa's first alternative exchange, ZAR X, made its debut earlier this year, disrupting the more than 50-year-long monopoly enjoyed by the JSE, settling and clearing the first purchase of shares in 10 seconds flat.
"JSE has been the only exchange in SA for over six decades. The launch of ZAR X has been an iterative journey. We realised that there was a real need for people to have liquidity in shares that drives financial inclusion and investor education. The regulatory framework makes it more expensive to own effective investment vehicles. We offer a free-of-charge account that can be opened with as little as a R1,000 investment that will start earning from day one. We are a disruptive exchange and a range of companies want to list with us," said Etienne.
MyGrowthFund is the result of Vusi's pan-African vision for stimulating entrepreneurial growth all over the continent. He said:
"You've got to make a million a month. The real world doesn't live in spreadsheets, so we only fund owner-run businesses that have been trading for at least 18 months. Entrepreneurs must take themselves seriously - this is the ticket price they must pay."
MyGrowthFund has backed 67 businesses thus far and is present in 256 South African municipalities. Vusi is looking to take it to eight South African countries by the end of 2018. "I don't start from the premise that the problem is not too big. I can't do small - it's not in my nature. We had 300 applications in first week and 1 000 in the second week, but our backend infrastructure can handle a business four times our size. Our promise is that we can help entrepreneurs make five times their revenue in three years - come to us because you want to grow."
Etienne examined the concept of crowdfunding as a funding mechanism, saying that regulation was stymieing its progress in the country. He said:
"Crowdfunding has taken off in a big way. You want to do with your money whatever is close to your heart. This is its attraction. The problem is the regulatory framework. Life happens and the regulator and big finance doesn't get it. Liquidity is what empowers people. When the chips are down, it is king."
The two men are considering working together to help bridge socio-economic inequality. According to Vusi, however, the cost of capital needs to be sufficiently low and directed at the producing asset - the entrepreneur. It is a mouth-watering prospect for those who yearn for change.
