Ordinary South Africans don’t need to be told to save more, or that they have a poor saving culture. What they need is opportunities to grow their wealth through investments that are accessible to their income level, says the founder of a local venture builder and business incubator Aions Creative Technology.
There’s enough money to go around in South Africa. It’s just unevenly distributed. In fact, a World Bank report suggests South Africa is the most unequal country in the world, with 10% of the population owning more than 80% of the wealth. Credit Suisse’s Wealth Databook says South Africa’s richest 1% hold 41% of the country’s total wealth.
That’s got to change if South Africa is to address its socio-economic issues, including poverty and unemployment, says Mitchan Adams, the founder of Aions Creative Technology.
“The problem is that ordinary South Africans have extremely limited investment opportunities due to the high barriers of entry. We have to find ways to democratise wealth, as it were, if we’re going to address wealth inequality and our broader socio-economic challenges,” said Adams.
Aions recently launched a micro-investment platform that will allow ordinary South Africans to invest in rapidly growing start-ups for as little as R50 for a digital token, with zero upfront fees and low risk. The new platform, Aions Exchange (AEX), caters to start-ups seeking funding as well as South Africans wanting to increase their wealth exponentially.
It does this by allowing investors to own a fractional share in one of the business currently being mentored by Aions, and to share in the profits when the business is sold after three years. All companies listed on AEX are all high growth start-ups, with an innovative and technologically advanced approach to real world problems.
Unlike savings accounts with relatively low returns, AEX investments have the potential for significant growth. The minimum guaranteed return is 10% year on year over a three-year period, with a maximum potential return of 8.4 times the initial investment, says Adams.
“Investing in start-ups doesn’t have to be reserved for the rich. In fact, micro-investing is the future of entrepreneurship in South Africa. By pooling investments from the ordinary person on the street, and investing in sound and innovative start-ups which can then scale and grow aggressively to be sustainable, we will both create wealth and permanent jobs, which will result true broad-based shared value,” said Adams.
Investors can choose from three incubator companies currently being funded and mentored by Aions, and this will grow to at least 10 in the coming 12 months. The three are financial wellness and salary linked benefit platform Level Finance; electric mobility company Green Scooter; and Tubby’s Kitchen, which manufactures a range of healthy cannabis infused kitchen products for home use.
Adams says platforms like AEX have the potential to create employment opportunities and enable access to networks, private equity, venture capitalists, and global markets for small businesses. At the same time, the platform aims to bridge the wealth gap by providing opportunities for education, home-ownership, and other aspirations that were previously unattainable.
“Our mission is to create access and opportunities for all South Africans, with a strong focus on generating social impact rather than solely pursuing profits,” said Adams.
South Africans can participate in the AEX platform by visiting https://wealth.aions.co.za.