South Africa's R350 billion SME funding gap: A call for business readiness

DESPITE an improvement in investor confidence in South Africa, a Small and Medium Enterprises (SME) Empowerment organisation has highlighted concern about a R350 billion SME funding gap that persists because many businesses are not funding ready.

- YOGASHEN PILLAY

DESPITE an improvement in investor confidence in South Africa, a Small and Medium Enterprises (SME) Empowerment organisation has highlighted concern about a R350 billion SME funding gap that persists because many businesses are not funding ready.

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CEO of SME Empowerment organisation, Unconventional CA, Hiten Keshave, said the funding gap is most visible among smaller, micro businesses and informal traders. “Formal micro enterprises account for more than 86% of SME funding applications and contribute over 80% of SME job creation, yet they are the least likely to secure funding approval.”

Keshave added that there are growing signs that business and investor confidence is beginning to stabilise in South Africa. “Inflation has eased, energy supply has improved, and economic forecasts point to modest growth following several difficult years marked by weak demand, high costs and persistent uncertainty. Many people think that once conditions improve, funding becomes easier to access. But the reality is that there's still a big gap between the funding that exists and whether businesses are ready to qualify for it”.