Small and medium enterprises are routinely described as the engine of job creation in South Africa's economy, yet access to affordable credit remains one of the most cited obstacles to their growth.
The report's authors point to a mismatch between the design of guarantee schemes — intended to reduce the risk banks take on when lending to smaller, less established businesses — and the actual risk appetite of the banks administering them, which has kept approval rates lower than policymakers had hoped.
Business associations have called for a simplification of application processes, arguing that paperwork and collateral requirements often exclude precisely the informal and micro-enterprises the schemes were designed to help.
Treasury officials have acknowledged the gap in public comments and pointed to ongoing reviews of the guarantee framework, without committing to a specific timeline for changes.
Insight Factor's business desk will be following up with affected small business owners in a forthcoming feature.
