Savings, Investments& Funding
For Youth Ecopreneurs(SMEs, Co-operatives, Farmer Organisations/Associations)in Small towns in South Africa

MISSION
To promote and support conservation,
restoration, and sustainable land use
in South Africa’s hotspots as an
essential element of food security
and land reform, human and economic
development, and building resilienceto the impacts of climate change.

VISIONSouth Africa’s hotspots are restored
and maintained to provide water,food and climate change resilience
for the long-term benefits of people
and nature.

VALUES1.

We are passionate about nature andcherish the diversity of life from thesea bottoms to the mountain peaks.

2. We respect and trust each other, andwe embrace the diversity of our cultures,
talents, and experiences.
3.

We make every decision with integrity
and are accountable for the choices
we make.

4. We are optimistic that life on earth canbe preserved and that with our partners wewill witness unprecedented successes
in conservation.
5.

Conservation South Africa ©2019
20 Dreyer Street, 301 Heritage House,
Claremont, 7708
Phone: +27211003950
www.conservation.org/southafrica
ISBN: 978-0-620-85206-7 (Printed
version)
ISBN: 978-0-620-85208-1 (E-bookversion)Acknowledgements
We give thanks to various persons andorganisations that made the production ofthis booklet possible.
Photographs and Images
Conservation South Africa, Kate Miller,
Afregarde Strategies, Conservation
International
Writing and Editing
Abisha Kampira & Linette Mhlanga

We have the courage to take bold
action in the face of naysayers andcritics,
persevere through challenging times,
and pursue our vision tirelessly
and with enthusiasm.

i |Savings, Investments & FundingPurpose of this guideii |Savings, Investments & Funding

Conservation South Africa (CSA) works in many South African small towns characterisedby high unemployment rates, low literacy levels and poverty, factors that threaten

environmental sustainability efforts as they can drivecommunities to do whatever they can to survive,even if it results in damaging the environment. Rural
communities with many unemployed youths caneasily become poaching, deforestation and illegal
miningproblemareas.
Ecopreneurship,
entrepreneurship, saving and investing as ways of fighting poverty and unemployment
can support environmental sustainability efforts in small towns.
The target audience for this guide is:••••Land user groups - grazing associations, farmers associations, wildlife
associations, tourism associations
High schools located alongside protected areas in South Africa
Youths (16-35 years old) and youth-focused organisations
Communities living adjacent to protected areas in South Africa

CSA helps communities to adapt to the increasing and more frequent weather challenges
that affect their day-to-day lives. Through workshops, field demonstrations and training
programs, CSA provides people with the skills and knowledge they need to adapt theirland-use practices to the “new environment”.
Training programs are currently being held with communities in three regions in South
Africa these being Namaqualand (Northern Cape), Matatiele (Eastern Cape) and the
Kruger 2 Canyon in Limpopo. Emphasis is placed on teaching climate-friendly farming
techniques, understanding and restoring local ecosystems and on adopting nature-based
solutions on agricultural lands. In addition, Green Learning is an important strategy that
CSA implements to support communities to transition to alternative livelihoods that
reduce pressure on land.

iii |Savings, Investments & FundingThis guide has been prepared as ayouth-friendly, simple resourceonsaving, investing and funding for eco
enterprises in South Africa’s small
towns. It seeks to provide basic, butvery important information that theyouth and young ecopreneurs canbuild on at an individual level, (having
own savings and investment accounts),
at the business-owner level (having abusiness saving and investment
account) or at the group level (stokvel,
co-operative of farmer association
savings and investment accounts). The
guide further directs readers to otherrelevant information resources.
With some success stories coming outof similar communities, there is hopethat with adequate information andsupport, other youth and young
ecopreneurs can be encouraged tosave, invest and start and operate
successful businesses. CSA throughthis booklet hopes to provide
information that will encourage saving,
investment
andecopreneurship
cultures leading to less poverty and unemployment – both factors being expected toenhance environmental sustainability measures and efforts.

iv |Savings, Investments & Funding

Contents
Purpose of this guide
Contents
Saving and investingii
v
1

What is to save, what is to invest?
Saving and investing: Fears
Planning to save or invest
Why you must save
Where can you invest?
Where can I invest?
Stokvels in South Africa
How do I make money from saving/investing?
Saving and investing online
Get-rich-quick schemes

2
3
5
6
8
8
9
14
17
18

Understanding risks
in savings and investments19
19

Investing in your small business23

Business opportunities

32

Resources

38

Risks in investing
Understanding your risk fears

Small business sizes
How can I invest in my business?
Funding your SME
Getting supporting documents
Support with your business plan
Funding organisations
Funding competitions

Examples of business opportunity areas
Green business opportunities
Why businesses succeed/fail

21
21
24
26
26
29
30
30
31
33
35
36

v |Savings, Investments & Funding

Saving and investing“There’s no such thing as instant gratification,
not if you want to build something sustainable”
Amy Kleinhans-Curd - Co-founder anddirector of the PLP Group and lifelong
entrepreneur

1 |Savings, Investments & FundingWhat is to save, what is to invest?
Saving is putting money aside for future use. Saving can be done at an individual level(your own savings account), at a business level (a business savings account) and also at
a group level (stokvels, co-operatives, associations and syndicates).
Investing is putting your money in things of financial value (assets) that will bring you
more money in the future. Investing also involves putting money into starting andexpanding a business. This money is called capital. Investment in this booklet relates toputting money into assets and/or capital with a view of getting more money in the future.
An Ecopreneur: One
who owns or plans to
own and run a businessthat offers services andproducts that arefriendly to theenvironment.

As an ecopreneur, saving and investing can make it possible
for you to achieve personal and business goals. However, forthis to happen, you need to build the right level ofcommitment and to exercise patience. Because in mostcases money is not always easy to come by and because
there are many other uses for the same money, saving andinvesting may prove to be a challenge. The good news is that
one can start saving and investing even with a small amountof money provided one has the right attitude, commitment
and patience.

Asset: a thing you ownthat has a cash or
financial value.
Examples of assets areland, livestock, money ina bank or an investment
account

Commitment, sacrifice, consistency,
patience, long-term focus, continued
learning and discipline are important values
that you need to develop if your savings andinvestments are to grow.

Capital: money you put
in a business or a
project as an owner.

Before you start the saving and investing journey, it is also
important to understand that in most cases you will get the
rewards after some time and these depend on the amount ofmoney saved. While some investments may start accruinginterest from day one, this interest only accumulates tomeaningful amounts after some time. Generally, the larger
the amount and the longer the time it is saved, the more theinterest it will earn. With savings and investments, you
therefore need to focus on the benefits you will get in the
future rather than on the benefits you get in the present.

2 |Savings, Investments & Funding

Saving and investing: Fears
Some fears can scare ecopreneurs away from saving and investing. Most of these fears
are a result of not having enough information on saving and investing. A few common
ones are shown below:

I have no money –financial institutions
require a lot ofmoney fromme
Saving andinvesting is far
too risky – I willlose all mymoney!

Saving and investing is toocomplicated – a small-town
individual or ecopreneur will neverunderstand it

There are nosaving andinvestment
institutions
in my area
– I have
nowhere to do it!

Saving and investment costs too much - the charges are
too high for me or my small town business
Most of the fears stated above can be addressed by seeking information and looking forhelp in the right places. Other fears like not having money can be too challenging to deal
with as one cannot save or invest without money. Possible solutions would be to get alegal source of income like a job or starting a project to earn an income to generate themoney to start the saving and investment journey.

3 |Savings, Investments & Funding

Case study
Mr. Xaba: A livestock farmer saving to
expand his business
Mr. Xaba is a member of a grazing
association from the Eastern Cape.
For the past three years, he has been
selling his cattle at an auction
organised by CSA. The auction comesright into his village two to three times
a year. All farmers and grazing
associations who follow sustainablegrazing practices can participate in it.

Mr. Xaba has been able to sell two cows every year. The auction attracts a large following
making it possible for Mr. Xaba to sell his cattle at high prices. “Never before has a cow
from Mvenyane been sold for more than R10 000 to outsiders,” says Mr. Xaba. Mr.
Xaba is thankful for the support he has gotten from CSA: “It is for the first time everthat we have worked with an NGO that really cares about our welfare andwellbeing.” He now plans to expand and breed even more cattle using sustainablegrazing practices. He showed us a list of his past sales and saving records:

R
R
R
R
R
R

7 700
7 920
9 145
9 250
10 05010 325

Money saved
per every
auction
(30%)
R
2 310
R
2 376
R
2 744
R
2 775
R
3 015
R
3 098

R

54 390R

Sales fromauctions
First year, 1:Second Year, Auction 1:
Third year, Auction 1
Total

16 317

Compoundinterest at
7% per year
R
R
R
R
R
R
R

520
535
398
402
211
217
2 282

Total
amount(savings+interest)
R
2 830
R
2 911
R
3 141
R
3 177
R
3 226
R
3 314
R

18 599He has saved R16 317 for 3 years and has received R2 282 as interest. In total, he now
has R18 599. He now has enough money to buy more heifers for fattening and reselling
and will therefore make even more money come the next auctions.

4 |Savings, Investments & Funding

Planning to save or invest
Both saving and investing require one to give up somemoney now so that it can be available for use in the future(i.e. weeks, months or years) depending on the financial
products one chooses. Saving and investing for a businessmay require more time to raise money for equipment andexpenses such as salaries. In the case study below, see
how Tebogo plans and saves for his small business.

Product (financial
product): this is any typeof account, asset or planthat you can use forsaving, investing andborrowing and is offeredby financial institutions
like banks.

Tebogo wants to start a small herb processing
business. He will buy aloe vera, ginger and otherherbs, dry them and package them for sale in shops. When doing his research hefound that he needed R2800 for a start although he may still need to put in moremoney as he goes.

5 |Savings, Investments & FundingIn 10 weeks, Tebogo will be able to save the R2800 he needs for his business. He
will also get a little more in interest.

Why you must save
There are many reasons why different people save and invest. You, as an ecopreneur,
could save/invest because you need money to:store money for
future use (e.g.
lunch, retirement,
accommodation)

start or grow yourbusiness (e.g.
buying business
items for resale,paying for business
rent, paying
yourself a salary)meetemergencies
like illnesses,
accidents,
deathsfall back onwhen your plansgo wrong (e.g.
low sales, poor
harvests, rising
prices, losing ajob)develop your life
(e.g. educate or
skill yourself(returning toschool, college,
university)

Your purpose for saving or investing can guide the type of products you choose. You may
choose long-term investment products if you are planning to use your money after five
years or more. You could invest in shorter term products if you intend to use yourmoney sooner. Consultants within financial institutions can help you choose the right products.
If you are saving or investing to start a business, the type of products you select will
depend on the timing you want to start the business and the money you plan to raise.
It can be long, medium or6short-term.
|Savings, Investments & FundingWho can help?
In most small towns, banks offer investment and savings accounts and you can go tothem directly for information on these. They also have websites and apps where saving
and investing information is available. Before opening any savings or investment account,
it is important to understand what you will be giving and what you will be getting in return.
You therefore need to ask about:••

The saving and investment process - how it starts and how it ends
The costs and charges involved in opening and maintaining a savings orinvestment account•
The interest or returns that will be earned on the account.
•
What else you can get for saving/investing with them. (For example, will they atsome point give you a business loan if
you need one?)
Consultants: People who are trained to help
you with information and advice in a particular You must always get the full information
area. Finance and investment consultants on the type of account you are opening.
can help you with saving and investment Asking for this information is part of
information. They may use other names like investing. Remember, most of thesebanking consultants, financial services financial institutions have got people
employed just to help you with thisconsultants and personal bankers.
information. You can also learn how to
Financial
institutions:registered save and invest from local training
organisations that provide financial services workshops that are sometimes held in
like savings accounts and investment communities like yours.
accounts. Examples are commercial banks,
mutual banks, co-operative banks andothers.

7 |Savings, Investments & FundingWhere can you
invest?
Where can I invest?
There are many places where one can save/invest in South Africa and these offerdifferent types of products. They include:
•
•
•
•
•
•
•

Co-operative banks
Mutual banks
Stokvels
The South African Post Office Bank
Commercial banks
Fund management companies/asset managers
The Johannesburg Stock Exchange

Q&A: Investing on the Johannesburg Stock Exchange
Q: What is a Share?
A: If you own a Share, you own a portion of a company. Imagine the company
as a pie. You own a slice of the pie. You can also call a share equity or stock.

Q: Can you buy shares directly with the JSE or do you need a broker?
A: The JSE does not sell shares directly. You have to go through a JSE
registered stockbroker. With online share trading now widely available, you areable to invest any amount on the stock market via the internet.

Q: What is the minimum amount I can invest on the JSE?
A: The minimum amount varies depending on the share or asset class you wantto buy. For some Exchange Traded Funds (ETFs), the minimum is R300 amonth or a one-off amount of R1 000.
Want to learn more about investing on the stock market? Take a free online
course for beginners offered by the JSE:

8 |Savings, Investments & Funding

The Stock Market for Beginners – a free online course by JSE

The JSE Investment Challenge is a platform where ecopreneurs in schools andtertiary institutions can gain real experience in investing on the JSE. The challenge
has run for over 46 years and has equipped an estimated 22 000 young South
Africans with investment and financial literacy skills. To get more information on
the challenge, including how to enter, please visit http://schools.jse.co.za

Stokvels in South Africa
Stokvels are one of South Africa’s most successful form of community-based savings
and investment institutions. Below are some statistics on stokvels in SA.

9 |Savings, Investments & Funding

Can I start a stokvel or a savings
group?
What if I can’t find a stokvel, can I startone? Yes you can start one. But theprocess needs you to be an honest andresponsible person who can gain the trustof others. Also, you can develop a stokvel
further into a more formal savings groupthat is linked to financial institutions. To
learn more about savings groups visit
https://mangotree.org/About-SG2020

Most stokvels have a clear
constitution, leadership structure
and a saving and investment plan.
Also, organised stokvels make useof banks and other financial
institutions for saving and investing
advice and products. It is always agood idea to check if your stokvel
follows the above.

10 |Savings, Investments & Funding

Saving/investing in groups

11 |Savings, Investments & FundingBENEFITS
CHALLENGES
EXAMPLES

Individuals

Business

Cooperative,Farmer/
Grazing
Association/Stokvel/
Community group

Motivation and encouragement fromother membersx

depends onsize✓

Can raise large contributions frommany peoplexdepends on
size✓

Members can share ideas on best
investment optionsx

depends on
size✓

Members can enforce saving andinvestment rules that encourage
income growthxdepends on
size✓

Members can invest in products that
require large principal/capitalx

depends on
size✓

Freedom of choice on saving andinvestment products, amounts, timeframes✓

depends on
sizex

Benefits from tax-free investment
thresholds

✓

x

x

Potential for conflict on saving andinvestment decisionsx

depends on
size✓

Some members may not contributemoney as agreedxdepends onsize✓

Funds can be abused if the group ispoorly governedxdepends on
size✓

There is lack of personal freedom of
choice on saving and investmentsxdepends onsize✓

Funds withdrawals during
emergencies may be slowed down by
the need to consult other members

x

x

✓

Changing types of investments may
take long due to the need to consult
and agree with others

x

x

✓

Shares

✓

✓

✓

EFT

✓

✓

✓

Unit trusts

✓

x

✓

Saving accounts

✓

✓

✓

Fixed accounts

✓

✓

✓

Flexible accounts

✓

✓

✓

12 |Savings, Investments & FundingRequirements for saving and investing
When choosing where to save or invest you may need to ask the following questions:

1. Do their products meet my saving/investment needs?
2. What will I get for saving/investing with them?
3. What will I pay for saving/investing with them?
4. What are the chances that I will lose my money while
investing/saving with them?
5. How easy is it for me to get my money back when I want it?
6. Is it easy for me to get their services from their branches oronline?
7. Do I meet their other requirements? (e.g. proofs of residence,minimum investments amounts, age restrictions)8. What do other people say about their services?
9. If they need to be registered, are they registered?
For you to start saving and investing in financial institutions, the following are usuallyrequired:••••Your valid South African identity document (RSA ID) or passport (in thecase of non-South Africans)Your proof of residence (Letter with your physical address, water orelectricity bill of where you stay)Your money
An application form

Remember, you do not have to start with a lot of money. Most institutions accept as little
as R300 to open a savings/investment account and a minimum balance of R0 to keep theaccount active. Check your budget to see how much you can afford to save/invest
monthly.
Please visit this website for more information:
https://support.easyequities.co.za/support/solutions/articles/13000015026- whatdocuments-can-i-use-as-a-proof-of-address-for-fica-

13 |Savings, Investments & Funding

How do I make money from saving/investing?
The table below summarises how an ecopreneur can make money from saving andinvesting.

What is it?

How do I get it?

Dividend

Money paid to shareholders fromprofits made by a business or part ofthe profit you take out of yourbusiness for personal use

Investing in shares,
investing in a business

Interest

Money that is paid to you for keeping
your money in an institution for acertain time

Saving and investing in
financial institutions

ProfitProfit may be kept in a business this is called retained profit orretained earnings

Investing in a business

Capital gains

Money you make when you buy aninvestment at a low price and sell it
at a higher priceInvesting in a business andin a financial institution

The above are also referred to as RETURNS. Relating to interest rates, there are two
types of interests paid to savers and investors:

Compound Interest:
interest credited daily,
monthly, quarterly,
semi-annually, or
annually on bothprincipal andpreviously paidinterest.

Simple Interest:
interest paid only on
the amountinvested/saved.

https://www.wpi.edu/student-experience/resources/financial-literacy/terms

14 |Savings, Investments & FundingGetting back your money
Different savings and investment products have different maturities. A normal savings
account will enable you to get your money whenever you want it. Fixed deposit accounts,on the other hand, may not allow you to take out your money before the end of the agreed
investment period (the maturity).

Maturity: in finance thisis the date at which aninvestment can be
cashed in as money.

Product (financial
product): this is any typeof account, asset or planthat you can use forsaving, investing andborrowing.

On the stock markets (where
shares are bought and sold), it
may be possible to get yourmoney back when you want it by
selling your shares provided
someone else is willing to buy
them. Sometimes this may mean
selling shares below the priceyou bought them, therefore
making losses.

Knowing the time, it takes to get your money out of investments is important because:
1.
2.
3.

It enables you to plan your cash flows – you will know when you will haveyour money backIt enables you to see if the return you are getting is good. If your money issaved/invested for a long time, it must also get a higher return than if itwere saved/invested for a shorter period
It helps you decide if an investment is good for your future financial needs

If you want to use your money soon, it might not be a good thing to put it in investmentsthat give it back after a long time. Investors sometimes make losses while trying to get
out of investments that may be too long for them. These losses come as a result of:••

Penalties that may be charged for getting your money before theinvestment’s maturity date
Being forced to sell your assets before they have reached a good price thatgives you a profit

15 |Savings, Investments & FundingFinancial products and how they pay backWith these products, you get interest paid on top of the money you
saved or invested.
Savings accountFixed account
Flexible account
Retirement funds
StokvelUnit trusts(interest)

allows you to save your money and get interest. You can put
in money as many times as you like.
allows you to save money that you put in as one big payment
for an agreed fixed period
allows you to save both one big payment (lump sum) andadditional deposits and get interest on your money
you put in money monthly for use after retirement
together with others, you save your money usually with eachmember putting the same amount monthly
many investors who may not know each other put in money
under a unit trust manager who in turn buys assets theywould otherwise not afford as individuals. The returns onthese are shared depending on the amount invested by each
investor

With the below products, you benefit when the price of the product increases.

Unit trusts
on shares

various investors who may not know each other put together
money under a unit trust manager and buy shares theywould otherwise not afford as individuals. The returns onthese are shared depending on the amount invested by eachmember.

Sharesyou buy part of a company (shares) and may sell these when
their price increases.

Krugerrands/gold

gold coins that you can buy. As a small investor, you canbuy unit trusts for gold and other minerals.

Fixed property

Exchange-tradedfunds

buildings and land that you can buy for resale when theirprice goes up. As a small investor, you can buy property unit
trusts as your investment in properties.
you invest in a stock market index. An index measures
how a group of shares performs, for example, how sharesof all agriculture companies perform. Your investment
increases and decreases with changes in the index.

Please visit these websites for more information:
https://www.property24.com/articles/8-investment-options-to-get-your-money-working-for- you/26576
16 |Savings, Investments & Funding
http://www.savingsinstitute.co.za/sivehicles.htm

Saving and investing online
Saving and investing online involves using websites
and applications (apps) of financial institutions toinvest and save. This can be done on a phone, atablet or a computer. Some small towns are far awayfrom major cities and towns where financial
institutions are located. Fortunately, the growth ininternet technology makes it possible for
ecopreneurs to have access to financial institutions
through the internet. The advantages of saving andinvesting online are:
•
•
•

•

Convenience – you can transact anytime
Location - you can save/invest fromanywhere
Online tools - online investment
calculators and investment blogs areprovided on most financial institutions’
websites and Apps
Contact - It is quicker and easier tocontact institutions using chat lines
made available on most apps

Online fraud or internet fraud are acts that are doneby criminals to deceive other internet users in orderto steal information and/or money from them. As you
invest online you need to understand the risks
involved so that you do not lose money to thesecriminals. Always be on the lookout for:••Please visit these websites formore information:
https://www.capitecbank.co.za/h
elp-centre/privacysecurity/website-bankingsecurity/
https://www.standardbank.co.za/
southafrica/personal/productsand- services/security-•

Websites you do not know offering youvery high interest rates or returns if you
transfer money to them
Faked websites of common banks thatare used to steal people’s banking
details and money
Fake e-mails asking you to provide yourpersonal and financial details online

Before investing with any financial institution
online, first, check with it physically through avisit or a phone call. Any financial institution thathas a website should also have known offices
and addresses.

17 |Savings, Investments & FundingGet-rich-quick schemes
Get-rich-quick schemes are fake “investments” that criminals may ask you to join with apromise of quick, high returns on the money you invest. The common ones are known as“pyramid schemes” which rely on investors inviting other people to join the scheme. Theircommon promise is that as an investor/saver, all you need to do is to transfer or deposita certain amount of money that will grow very quickly, sometimes doubling in weeks
without you doing anything. These schemes are also getting popular by spreading theirword through social media.
What is common about these schemes is that:••••

They promise you very large payments without explaining how they come
about
They need you to get other people to join into the scheme for you to benefit
They do not seem to have permanent offices, management and employees
They are not registered to offer investment and saving products

Please visit these websites for more information:
https://www.spotongmag.co.za/articles/investment-scams-and-how-to-spot- them6729.htm
https://www.sabric.co.za/media-and-news/press-releases/ponzi-pyramid- schemes/

18 |Savings, Investments & FundingUnderstanding risks
in savings and investments“My advice to emerging young
entrepreneurs is to makea commitment to education, tolearning as much as you can, as
this will gear you to be more
focused and ready for any
hiccups this industry has to offer.
Accept failure as something thatmakes you stronger and be able
to absorb negativity.” – Thoko
Zwane, founder of Thoko’s
Diamonds
19 |Savings, Investments & FundingAs an ecopreneur, you must know that sometimes you may lose your money while saving
and investing. This chance of losing money is called risk. This should not scare you thatmuch but should encourage you to be on the lookout for possible losses and to find ways
to avoid them. To reduce these risks while saving and investing:

•
•
•
•
•
•

Do not save/invest in an unregistered organisation(except maybe a local stokvel that you really trust)
Do not put your money where bank charges are toohigh and interest rates are too low
Do not put your money in a financial institution that isreported to be facing money problems
Do not keep lots of money at home as it may not besafe and will not earn you any interest
Do not save/invest in products that you do notunderstandDo not save/invest in products/institutions where theinterest rate is lower than the inflation rate

Always remember, information is your biggest tool for avoiding risks in investments andsavings.

Inflation
Inflation rate: the speed at which
the prices of goods and services
increase(for example the price of bread,
fuel, etc.).
If the inflation rate is 4% and yourfinancial institution gives you a 2%
interest rateon your savings, it means thatprices are rising faster than yourmoney isgrowing. Your financial institution
should give you an interest rate
above 4%.
That way your money grows fasterthan prices.
To get the Inflation rate, you can go
to news and business websites likenews24.com or www.fin24.com or
simply type “Inflation rate South
Africa” on Google.

20 |Savings, Investments & FundingRisks in investingWith saving, the chances of losing
money may be lower than withinvesting. In investing you may lose
the money you put in (the principal)
and the expected return as a resultof bad decisions or happenings.
Every investment has its different
risks but these are common ones:
Investing in assets whose prices:•••

move up and down quickly
and regularly
may go below the price atwhich you invested
are not well-understood or
not discussed with you

As an ecopreneur, saving andinvesting requires you to understandwhat is going on in the country. You
should therefore listen to the news
every day, read a newspaper or go
online to catch the news. Some of
the risks above can be managed by
you moving your money away fromsome investments in response towhat is or could be happening in theeconomy.

Understanding your risk fears
Different people have different levels of fear when it comes to saving and investing. As
an investor/saver, you need to understand your risk/return preferences. For example, do
you prefer taking high risks that also have high returns or a comfortable with low risks
and low returns?
With any choice you make it is important to:••••

Fully understand the savings and investments products you are getting
Have a plan for bad situations. What will you do if indeed you lose out?
Understand your ability to move out of investments when they become risky
Have a way of watching your risks and understanding how they can come aboutYour risk and return choices will help you to choose financial products that best suit yourpreferences.

21 |Savings, Investments & Funding

Can you pick the square that works
best for you?
High Risk - High Return

Low Risk - High Return"The chances of losing my money are"The chances of losing my money arehigh - but I can also get a lot more
low - I can also get a lot of money ifmoney if everything turns out aseverything turns out as planned"
planned"High Risk - Low Return

Low Risk - Low Return"The chances of losing my money are"The chances of losing my money arehigh - If things turn out as planned, thelow - and if things turn out as planned, I
additional money I get too little for thealso get a little money in return"risk I have taken"

22 |Savings, Investments & Funding

Investing in your small business
Everyone can rise above their circumstances
and achieve success if they are dedicated toand passionate about what they do – Nelson Mandela

Perseverance always pays off at
the end. There were many times
when I thought of giving up andlooking for a job, but knowingthat there are countless
opportunities out there, I nevergave up: Vasie Sewramulu, aSouth African ecopreneur
building an eco-friendly
detergent manufacturingbusiness

23 |Savings, Investments & Funding

Investing in your small business involves putting your commitment and money into it andexpecting it to bring future returns that you will enjoy. It involves understanding that forthe business to succeed, it will take a lot of time and hard work.

Small business sizes
In South Africa, there are several types of registered small businesses. These are small,micro-sized and medium-sized businesses (SMEs). When your business is classified as
an SME, there are various tax benefits that you get. For instance, SMEs do not pay income
tax for the first R79 000 of their before-tax profit. In some business opportunities ingovernment, like tenders below R30m, special preference is also given to SMEs. Being
called a small business should not discourage you because it is for your benefit as astarting or expanding young ecopreneur.
Sole traders
Microbusiness
Small businessMedium-sized businesses
Co-operatives

No specified number
0-10 employees
11-50 employees
51-250
Minimum of 5 members

Micro businesses are the smallest businesses in South Africa.
Many youth ecopreneurs will start at this stage working with
one-to-ten employees. By size, they are followed by small
businesses and medium-sized businesses as shown above.
Co-operatives are another form of enterprise. A minimum of
5 persons who share the same business or developmental
objectives can come together to form a co-operative. It needs
to be registered by the Registrar of Co-operatives. Please
follow this link on how to register a co-operative:
Please visit these websites for more information:
http://www.cipc.co.za/index.php/register-your-business/co-operatives/
Other types of enterprises are farmers’ associations and grazing associations. Farmers
come together to form associations through which they can assist each other and work
together.
As an ecopreneur, you should know how your business is classified. A business can be
an SME even if it is not registered. However, youth ecopreneurs are encouraged toregister their businesses to ensure that they get tax benefits and funding opportunities
that can come with being an SME.

24 |Savings, Investments & FundingWhy invest in a small business?

Job creation: small businesses
create jobs for youths, helping to
reduce high unemployment
levels.

Services and products: They
provide many products and services
that are sometimes more affordable
to small-town communities.

Income generation
and wealth creation: small
businesses can create wealthfor their owners, theiremployees and communities
helping to fight poverty.

Conservation and sustainability:

Some small businesses are
directly involved in
to reduce social and economic
conservation while others
differences that are a result of the past
produce their goods in waysthat do not harm the
Solutions to social problems: They canenvironment.

Economic empowerment: They help

help to keep young people focused on developing
their lives thereby reducing crime, drug andalcohol abuse.

Source of innovation (new products): small
businesses are known for coming up with new anduseful solutions to community problems.

25 |Savings, Investments & Funding

How can I invest in my business?
As a youth ecopreneur, you can start a businessfrom scratch. You can also invest by growing yourcurrent business for example, by opening anotherbranch of your glass recycling business in anothertown. You can also buy-in into an already operating
business. You do this by giving the current owner anamount of money that is equal to an agreed numberof shares. You therefore become a shareholder ofthis business.
You can also join an existing co-operative, becoming
a member who owns part of it. Another option is tobuy a franchise. This is a licence or an agreement toname and run your company as part of a successful,
better-known business. You then pay a fee for using
the better-known company’s name, products andprocesses.
The above choices need different amounts offunding. With saving and investing you can be able
to put in your money into your business. You canalso get funding from financial institutions, otherpeople and organisations mentioned earlier.

Funding your SME
Funding refers to getting money or “funds” to start,
support and grow your business. Funders are thepeople and institutions that provide these funds.
Funds can be in the form of loans, grants, equity(shares you sell to get money for your business) or
any combination of these. SMEs operating in smalltowns, like those operating in major urban centres inSouth Africa can approach funders to get money tostart or grow a business. However, the mostimportant funder and investor in your business isyou.

26 |Savings, Investments & FundingWhat funders expect
People and companies putting
money in your business expect
different things. However, thecommon things are a viable businessor business idea and a passionate
ecopreneur who is willing to commit
her/his time and effort to it. A viablebusiness or business idea is one that:•••• Has the potential to start andgrow if it is supported• Has customers or has identified
many customers for its products andservices• Can be successfully operated by
you and others given your interests, experience, skills and support available toyou
Can make enough money to pay its costs or has the potential to do so within agiven time.
Is legally and fully registered if it operates in a sector that requires registrationand licensing
Is environmentally sustainable – it would not harm the environment by using
illegal or environmentally damaging methods

Funders also require documents that will help them to decide if your business or businessidea is viable. These include registration certificates, business plans, tax certificates andother documents that will be discussed later. These requirements sometimes discouragesome ecopreneurs who have little information on how to get them.
Like with saving and investing, there are also fears that discourage ecopreneurs fromlooking for money for their businesses. Some of these are listed below:

Funding: True or False?
1. My business is too small to get any funding - FALSE
2. My business is located far in a small town, no one will fund it - FALSE
3. My business has no assets, no one will fund it - FALSE
4. They require documents that a small-town ecopreneur cannever get - FALSE
5. I have no security so I will never get funded – FALSE
6. I cannot get funded until I travel to their big-city offices – FALSE
27 |Savings, Investments & FundingAs you will see when you begin your business journey, some of the fears you might holdmight not be real. Information and advice are the best tools to fight these fears. Look for
information and advice in the right places.

So where do I start..?
2 Make contact1

This could be through calling,e-mailing the funders orvisiting their offices.

Look forinformation
Gather as muchinformation as you canon who can provide
funding.

7.Addressing any
issuesIn most cases, you will not get
funded directly after making anapplication. The funders may raiseissues that may need to beaddressed. Address these issues.

6.Get funding
Before funding, funders may ask
to visit your business site. They
may also ask you to explain
your business further and ifthey are happy they may fundyou. Usually, this is throughbuying the assets you stated inyour application form andbusiness plan and giving you

3 Gatherdocuments
Gather ALL thedocuments that areneeded for theapplication for funding

4 Apply
Some organisations will
require you to e-mail yourdocuments to them. Somehave websites where you
can upload yourapplication and therequired documents. Somemay want you to submit
them manually.

5. Follow up
Once an application has
been sent, the next step isfollowing
it up. The
first
28 |Savings,
Investments& Fundingfollow-up will confirm if itGetting supporting documents
Company registration: This involves getting an official certificate that shows that yourbusiness is formally registered with the government. You can register your business with
the Companies and Intellectual Property Commission (CIPC) online and also receive
company registration documents online. This makes it easy for you if you are in a town
without CIPC offices.
SARS tax registration: This is getting
officially listed by South African Revenue
Services (SARS) as a taxpayer. Your
company may be required to pay certain
Tax exemptions: permission not totaxes or may need to benefit from tax
pay certain taxes that other businesses
exemptions and for this to happen it mustare required to pay.
be registered as a taxpayer. All registeredcompanies in South Africa are required toregister as taxpayers. You can register for tax online. Your company registration comeswith income tax registration. Other tax registrations such as Pay-As-You-Earn (PAYE),
Value-Added Tax (VAT) can be registered for separately online.
Income tax: tax that a business pays
from the profits it makes.

Broad-Based Black Economic Empowerment (B-BBEE) certificate: This is a documentfrom government that shows how your company economically empowers other South
Africans including yourself, as required by empowerment laws. You can get B-BBEE
certificates online from CIPC.
Online registration makes it easy for ecopreneurs in South Africa to apply for businessand tax registration. Visit the website provided below for more information and assistance.
Please visit these websites for more information:
http://www.cipc.co.za/index.php/register-your-business/companies/registerprivate-company/
https://www.sarsefiling.co.za/Forms_Guides.aspx
http://www.cipc.co.za/files/6215/2932/7557/Step_by_step_guide_BBBEE_applicat
ion_via_e- services_v0_1_2.pdf

29 |Savings, Investments & FundingSupport with your business plan
A business plan is a document that outlines what your business is about, what it intends
to get in the future and how it will get there. It provides detailed information on yourproducts and services, customers, markets, management, employees, operations andmoney you expect to get, where you will get it and how you will spend it.
Unlike other documents, like a tax clearance certificate that you request from the South
African Revenue Services (SARS), a business plan will need to be prepared by yourself.
Some ecopreneurs who have the money to do so consult private business plan
consultants to get it prepared. However, even if you do not have money to consult a
consultant and are not able to prepare one yourself, consider some organisations that
can help.
Several South African institutions offer free advice and support on business plan writing.
These include the Small Enterprises Development Agency (SEDA), the National Youth
Development Agency (NYDA, the National Empowerment Fund (NEF) and the Industrial
Development Corporation (IDC).

Funding organisations
There are different forms of funding or financial support available to ecopreneurs. Someinstitutions will only fund local businesses, others will fund all businesses; some will fundalready operating businesses and others will fund start-ups as well. To avoid getting
disappointed, get information on institutions that fund:••••Start-ups (if you are a start-up)
Businesses in your sector ( for example the tourism sector or sustainableagriculture)
Business to the amount you need to start up or expand
Businesses that may not have security for borrowing

As you do this search you can identify institutions that are most likely to give you moneyfrom the several that exist. So start with institutions that fund start-up businesses in yoursector up to a certain amount and expand your search. Also, start with institutions thatoffer grants and move on to those that do not ask for collateral or security for a loan andhave low interest rates. These are mostly government funds also called developmental
finance institutions (DFIs).

30 |Savings, Investments & FundingHere are some of the many government-related organisations that fund small
businesses:
Co-operatives Incentive Scheme (CIS)
Umsobomvu Youth Fund
Khula FundNEF-Imbewu FundNEF-Rural and Community Development Fund
NEF: Women's Empowerment FundNEF-uMnotho Fund
SEFA-Amavulandlela Funding Scheme
SEFA loans
National Youth Development Agency
Please visit these websites for more information:
https://www.fundingconnection.co.za/funding-agencies-in-south-africa
https://smesouthafrica.co.za/guide-government-funding-small-businesses/
https://www.youthvillage.co.za/business-funding-south-africa/

Funding competitions
Ecopreneurs can also raise money through funding competitions like the ones below:
United Nations Seed Awards

United Nations Organisations

Climate Launchpad

Climate KC

SME Toolkit Business Plan Competition

SME South Africa

31 |Savings, Investments & FundingChivas Venture Annual Competition

Chivas Venture

FNB Business Innovation Awards

FNB South Africa

Start-Up Energy Transition Awards

Start-up Energy Transition

Engen Pitch & Polish Competition

Engen South Africa

Business Investment Competition

Eskom

Important
1. Know the competitions’ application dates, requirements, terms and conditions
2. Thoroughly research on the competition including past winners and how they won
3. Take time to prepare your submission
4. Where there is the need, ask for assistance and advice
5. Submit before the deadline and include all the required forms, documents etc.

Business
opportunities“In my experience, inAfrica there is space forinnovation. and you don’t
have to look far, especiallywhen you are at a
disadvantage. Look aroundyou. You might beexperiencing a problem
that is a need in thecommunity.” - Sizwe
Nzima, co-founder ofIyeza Express.

32 |Savings, Investments & Funding

There are many small business opportunities you can take advantage of in and aroundyour town. These require different amounts of money and resources to start.

Examples of business opportunity areas
These are just some of the many opportunities you can take.

ARTS AND CRAFTS
Beadwork
Sculpturing
Painting and drawing
Music and dance groups
Interior designing
Signage making
Jewellery making
FARMING
Organic farming
Horticulture
Growing herbs
Floriculture
Fish farming
Grain farming
Animal raising (poultry, cattle, etc.)
AGRIBUSINESS
Poultry stock-feed making
Livestock feed production
Farming labour support
Farm area security
Beekeeping and honey production
Fruit jam-making
Peanut butter production
Vegetable drying and packaging
Fruits packaging
Nursery
MANUFACTURING
Shoe and sandal making
Handbags and belts making
Enamel pottery making
Sustainable furniture making
Candle manufacturing
Custom stationery making
Soap and detergent making
Snack making

SERVICESInternet café
Seamstress services
Security services
Company registration services
Painting and construction
Transport and distribution
Tyre repair
Courier and delivery services
Gardening and landscaping
Car washing services
House and carpet cleaning
Blogging
Catering services
Tutoring
Hair and beauty services
Computer coaching
Junior sports academy
Fitness and health facilities
Tools and equipment hire
Printing, graphics designing
T-shirt printing
Handyman services
CV-writing
Proofreading services
Childcare and caregiver
Baking services
Marketing services
TOURISM AND TRAVEL
Tourist guides
Bed and breakfast services
Gifts and curios shops
Transport services
Traditional foods sales
Photography
Tourist accommodation

33 |Savings, Investments & Funding

Resources on business ideas
300 business ideas toinspire you into
Entrepreneurship
Complete list of small
business ideas in South
Africa you can do now!
50 best small businessideas in South Africa for2020

https://www.experthub.info/launch/business-ideas/300business-ideas-to-inspire-you-into-entrepreneurship/https://thebusinessalert.com/business-ideas-south-africa/
https://www.profitableventure.com/business-ideas-insouth-africa/

Low-cost franchise
opportunities for sale

https://www.franchisedirect.co.za/investment1/

101 Interesting ways tomake money in Africa –the top business
opportunities and successstories

https://www.smallstarter.com/browse-ideas/top-businessopportunities-in-africa/

Franchise opportunities
There are many franchise opportunities that ecopreneurs can pursue.
Some of these require as little as R12 000 to join. For more information
on franchises visit the following website:
https://www.franchisedirect.co.za/investment1/
https://whichfranchise.co.za/listing-category/low-cost-franchises/

34 |Savings, Investments & Funding

Green business opportunities
All opportunities in page 34 can be taken in such a way that they
do not damage our environment. As an ecopreneur, it is your duty toensure that your business is not a danger to the environment i.e.
it is not a danger to the soil, the air, the water, the animals andthe plants.

You can be a

Green business
•
•
•
•
•
•

by:

Being directly involved in environmental
conservation
Reusing and recycling material
Reducing the use of unnecessary materials
in business
Properly disposing any waste material
Reducing fuel and energy use
Not using products that are dangerous
to the environment

There are many benefits to running a green
business. Some of these are listed below:

•
•
•
•

You can get more customers interested
in environmentally-friendly products
You may be able to sell your products
at lower prices and get more customers
You create a good name for your businessYou can get funded by many funders who
like green businesses

When running a green business you also reduce
the risk of being fined for damaging theenvironment. More green business
opportunities:
https://www.greenfinder.co.za/Business-Opportunities
35 |Savings, Investments & Funding

Not all business opportunities will succeed at first. Some opportunities may be too difficult
or even impossible to follow through. To make sure that what you have identified is reallyan opportunity you can take, ask yourself the following questions:

10 important questions
1. What is the product/service that I will provide?
2. How is it different from other services and products?
3. Who are my customers and where can they be found?
4. Are there enough customers for it (Demand)?
5. How will I supply to them better than other businesses?
6. How will I make or get it?
7. Where will I sell it?
8. What price will enable me to make a profit?
9. How will I let the market know about the product?
10. Can I get enough money to provide/produce it?
If your answers to the above questions are “Yes” then indeed the business opportunity
you have identified might be worth developing into a real business. At the same time,
remember that you can also benefit from opportunities outside your community. Online
businesses make it possible for you to offer products and services through the internet.

Why businesses succeed/failStarting a successful business is not an easy task. According to Proudly South African,
70-80% of businesses that start fail in the first year. This means for every 10 businesses
started, 7 to 8 will fail in the first year and only 2 or 3 will succeed. With so much failure
in businesses, you need to work hard and get as much information and support as you
can. You may not know everything about the business but you must look for informationfrom those who know and can help you.
Please visit these websites for more information:
https://bizconnect.standardbank.co.za/grow/leadership-lessons/20-motivationalquotes-from-sa’s-top-entrepreneurs-to-inspire-you-this-heritage-day.aspx
http://www.lionessesofafrica.com/blog/2018/6/10/introducing-africas-innovativewomen-eco-preneurs-turning-environmental-challenges-into-sustainable36 |Savings, Investments & Funding
businesses

Why some ecopreneurs succeed/fail?

success

failureIdentifying a real opportunity

Business sets up with no real
identified opportunity (gap)

Understanding your competition

No knowledge of competitors andhow you can compete

Providing quality products andservices

Having poor-quality products oroffering poor-quality services

Knowing your customers andmarketing to them effectively

No knowledge of the customers
and his/her needs

Having passion for what you do

Lacking commitment, passion forthe businessSeeking help in the right places

Not seeking professional help
when needed

Financial access and discipline

Not having enough money to start& poor use of available money

Having a vision of want you wantto achieve

No vision or plan for the business

Setting a business at the rightplace

Business locates at a place notdesirable to customers

Adapting to change

Failing to change with the times,
laws and customer needs

Having the right skills needed for Not having the right skills or
the businessskilled helpers

37 |Savings, Investments & Funding

Resources
1.
2.
3.
4.
5.

6.
7.
8.

9.
10.
11.

12.
13.
14.
15.
16.

17.

Conservation South Africa, no date. Green learning: A rough guide to green learning, skills
development and career opportunities. Cape Town: Conservation South Africa.
Conservation South Africa, no date. Rural SMME Development Toolkit. Cape Town: Conservation
South Africa.
Department of Environmental Affairs, 2017. Green Economy Inventory for South Africa: an
Overview. Pretoria: Department of Environmental Affairs.
Department of Trade and Industry, 2019. Financial Assistance (Incentives). [Online]
Available at: http://www.thedti.gov.za/financial_assistance/financial_assistance.jsp
Easy Equities, 2019. What documents can I use as a Proof of address for FICA?. [Online]
Available at: https://support.easyequities.co.za/support/solutions/articles/13000015026-whatdocuments-can-i-use-as-a-proof-of-address-for-ficaGovernment of South Africa, 2019. Starting your own business. [Online]
Available at: https://www.gov.za/issues/starting-your-own-business-0
Greenfinder, 2019. Business Opportunites. [Online]
Available at: https://www.greenfinder.co.za/Business-Opportunities
Johannesburg Securities Exchange, 2019. Investing in our future: Changing the savings andinvestment culture in South Africa. [Online]
https://www.jse.co.za/content/JSEPresentationItems/South%20African%20Saving%20and%20I
nvesting_Gerald%20Mwandiabira.pdf
National Empowerment Fund, 2019. Funding solutions. [Online]
Available at: https://www.nefcorp.co.za/products-services/
National Youth Development Agency, 2019. Products and Services. [Online]
Available at: http://www.nyda.gov.za/#_
Nedbank, 2019. Staying safe while doing online banking. [Online]
Available at:https://www.nedbank.co.za/content/nedbank/desktop/gt/en/aboutus/legal/fraudawareness/how-to-keep-safe-online-banking.html
Saving Institute of South Africa, 2019. Saving Vehicles. [Online]
Available at: http://www.savingsinstitute.co.za/sivehicles.htm
Small Enterprises Development Agency, 2019. Offerings. [Online]
Available at: http://www.seda.org.za
Small Enterprises Development Agency, 2019. SEFA direct lending products. [Online]
Available at: https://www.sefa.org.za/services/direct
SME South Africa, 2019. A Guide to Government Funding for SMEs. [Online]
Available at: https://smesouthafrica.co.za/guide-government-funding-small-businesses/
South African Banking Risk Information Centre, 2019. Ponzi and Pyramid Schemes. [Online]
Available at: https://www.sabric.co.za/media-and-news/press-releases/ponzi-pyramidschemes/Standard Bank, 2019. Scams. [Online]
Available at: https://www.standardbank.co.za/southafrica/personal/products-andservices/security-centre/bank-safely/scams

38 |Savings, Investments & Funding39 |Savings, Investments & Funding

Conservation South Africa
20 Dreyer Street, 301 Heritage House
Claremont, 7708
Phone: +27211003950
www.conservation.org/southafrica©2019
ISBN: 978-0-620-85206-7 (Printed version)
ISBN: 978-0-620-85208-1 (E-book version)

Printed on 100% recycled paper

40 |Savings, Investments & Funding41 |Savings, Investments & Funding