SMEs under huge pressure

BUDGET: HOPE FOR COMFORT FROM MINISTER'S SPEECH

- Tshehla Cornelius Koteli

Small and medium enterprises (SMEs) contribute significantly to the economy. However, the sector faces challenges that prevent it from thriving to its fullest potential.

Some of these need the government to find solutions.

So, the sector will eagerly listen to Minister of Finance Enoch Godongwana deliver the budget speech on Wednesday.

Garth Rossiter, chief risk officer at Lula, says according to its data, SMEs are under immense pressure.

"Our data shows that SMEs face immense pressure, with a 50% drop in turnover year-on-year.

"The highest interest rates in more than 15 years have restricted consumers' ability to spend, which has had a massive impact on turnover across all industries," he said.

Rossiter says the pressure has resulted in the sector not being able to contribute to the country's economy to its fullest potential, leading to almost no growth in last year and shrinking in the third quarter.