Young entrepreneurs in Southern Africa struggle with funding gaps

Leonard Ncube and Leonorah Ncube
YOUNG people from across Southern Africa have expressed concern over a financing gap for businesses, as financial institutions remain reluctant to fund start-ups.
Speaking during a panel discussion on financing entrepreneurship at the ongoing SADC-United States Exchange Alumni Summit in Victoria Falls yesterday, participants—drawn from entrepreneurial and fellowship programmes as well as civic society in 10 SADC countries—agreed that securing funding for new businesses remains a significant challenge.
More than 200 young people from 10 SADC countries are attending the summit, which began on Wednesday and ends today.
Held under the theme “Regional Alumni Connections: Advancing Sustainable Solutions to Global Challenges,” the summit aims to strengthen business ties, foster collaboration, and explore new growth opportunities in the region.
The USA Alumni Summit is a gathering of alumni from the US Department of State programmes, with the overarching goal of capacitating and empowering the next generation of African leaders.
The panellists included Mr Patrick Maseko, an executive head of innovation at ZB Financial Holdings; Ms Tadala Peggy Chinkwezule, a lawyer from Malawi; and Ms Thabo Joy Masiye, an enterprise developer from Zambia. The discussion was moderated by Mr Aylwin Chiyoka, a financial services leader from NMBZ Bank.
The panellists emphasised the need for entrepreneurs to bridge the financing gap by identifying alternative and blended funding sources.
“There is a disconnect between banks and what small and medium enterprises (SMEs) are looking for. Banks prioritise market validation, meaning they want to know how they will recover their money. They also look at governance—how a business is structured—growth, scalability, and whether lending institutions will see a return on their investment,” said Ms Masiye.
She added that entrepreneurship is about innovation, and businesses should remain resilient even if they struggle to attract funding. Ms Masiye encouraged SMEs to explore microfinancing, blended financing, and networking to connect with potential funders.
Mr Maseko urged small business owners to embrace financial literacy, highlighting that one of the major obstacles for start-ups is the requirement for three years’ financial statements before banks will consider providing funding.
“It is difficult to convince a bank to lend without meeting their requirements, so there is a need for financial education and collaboration among start-ups. Financial institutions are also increasingly focusing on financing agriculture, especially by providing insurance for small-scale farmers,” he said.
According to the World Bank, around 70 percent of SMEs lack financial backing, underscoring the need to close the funding gap, particularly in under-served communities.
Ms Chinkwezule noted that in Malawi, only 40 percent of SMEs contribute to the Gross Domestic Product, with the major challenges being lack of access to finance and capacity building.
“To secure more funding, we need to move and develop faster. SMEs and businesses must be investor-ready and also seek alternative funding sources,” she said.
The panellists called on SMEs to invest in training, collaborations, reading, and mentorship to expand their networks.
Participants urged banks to provide SMEs with contracts for service provision and to create more funding opportunities. They also appealed to the Alumni Association to establish a cross-border trading platform to enable young entrepreneurs to collaborate and market Southern Africa’s economic potential.
Mr Burzil, an expert from South Africa, reiterated the need for entrepreneurs to develop well-structured businesses.
“We need to equip entrepreneurs with the skills to run proper businesses. There is a gap in the market, but the real question is whether there is a market in that gap. Businesses need to create value first before investors believe in them,” he said.