The 2024 SA SMME access to finance report: a game-changer
Finfind, one of South Africa's leading online access-to-finance platform for micro, small and medium businesses, is set to publish the 2024 SA SMME Access to Finance Report, the country's most comprehensive study of its kind.
The report is anticipated to provide groundbreaking insights into the SMME funding landscape.
Finfind’s Inaugural SA SMME Access to Finance report, that was sponsored by The SA SME Fund, was published in July 2018.
The Finfind SMME data sample used in the inaugural study was analysed by an independent research company and was compared with credible SMME datasets for the 2017 study period, these included the formal compliant SMMEs in the SARS data set, the Quarterly Labour Force Survey (QLFS) and Stats SA data samples used in the Bureau of Economic Research (BER) Report and the GEM South Africa data sample for the same period.
The much anticipated 2024 edition builds on this legacy with analysis of the latest SMME dataset and an expanded national funder base, offering a critical analysis of the funding landscape for small businesses.
Finfind’s CEO, Darlene Menzies, has garnered local and international recognition for her in-depth understanding of the SMME landscape said, "Small businesses are the backbone of South Africa's economy, yet they face significant barriers in accessing finance - one of the most critical factors for their growth and survival. We know that the key challenge for lenders is the lack of business credit data in the country and the knock-on effect this has on banks and DFI’s on appropriate credit assessments and scoring. Funding readiness is the major challenge for the business themselves.
"This report aims to provide data-backed insights on the SMMEs seeking funding to inform financial product development, policymaking, and the allocation of resources to address the challenges in this sector," Menzies said.
Key Highlights of the 2024 Report
The report is based on a nationally representative, clean data sample of 10,000 SMMEs that applied for funding between 1 September 2023 and 31 August 2024.
Since the inaugural report, the number of active SMME funders in the country has more than doubled, from 148 funders with 315 finance products, to 328 active funders with 605 finance products (including grant, equity and debt).
The report will provide updated insights into South Africa's SME credit gap building on the findings of the 2018 report, as well as the SMME funding supply and demand mismatch.
The 2024 report reflects a collaborative approach with sponsors and partners such as the Department of Small Business Development, Stellenbosch University's Bureau for Economic Research, the IFC and big industry players such as African Bank, Experian and the SAB Foundation.
SMME data in South Africa is scarce, making reports like the SA SMME Access to Finance Report invaluable for informing policy decisions and the development of appropriate financial products and services, including funding readiness programmes.
"By making this report freely available, we aim to empower all stakeholders with the knowledge needed to address the challenges of accessing finance and to build a thriving SMME sector that can support South Africa's economic growth," Menzies added.
The inability to access finance remains a leading cause of micro, small and medium business failure in South Africa, underscoring the importance of addressing the growing SMME credit gap. While there are many studies highlighting SMME challenges in general, few focus exclusively on funding. This report addresses this reporting gap, offering evidence-based insights and actionable recommendations.
The findings will be released at the end of the first quarter of 2025 and are expected to provide a comprehensive understanding of the current funding landscape.
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