Confidence among SMEs up but funding a problem

Johannesburg – Business confidence among owners of small- and medium enterprises (SMEs) has risen marginally, despite various challenges and the difficult economic landscape as a result of the Covid-19 pandemic and the national lockdowns.

This is according to the Business Partners Limited SME Index for the fi rst quarter of this year.

The data shows that entrepreneurs have a more bullish outlook for their businesses for the next 12 months with many expecting their enterprises will grow.

“Over half of those surveyed also feel confident about their business prospects for the year.

This is despite the drop in confidence levels that the local economy will be conducive for business growth in the next 12 months [decreasing to 43% from 45% in Q4 2020],” Business Partners chief operating officer Mark Paper said.

“Added to this, the index shows that confidence levels in both the private sector and government’s ability to support SME development are low. This may be indicating that the detected level of optimism from business owners and entrepreneurs is not rooted in the economy or external factors, but rather in their own ability to navigate the challenges in their operating environment.”

The SMME Covid Impact Report released a few months ago showed that access to funding remains top of the list of challenges reported by SMMEs. Of the total funding requests made during the first five months of lockdown, 47.9% of the funding requests were made to the government, 27.4% to banks and 13.6% to family and friends, and the balance made to formal lenders.

One of the major frustrations for business owners is that more than 60% of those who applied for government funding did not receive a response to their applications.

David Morobe, the regional manager of Business Partners, said that SME owners seem to be shift ing their focus to more practical challenges to improve the ease of doing business.

“Where funding used to be top on the list of support that SMEs want from the government, the biggest needs are now less red tape and direct business flow from government. This may indicate that while SMEs are becoming more self-reliant in terms of finance, they still recognise that there is a need for the government and other stakeholders to continuously improve the SME ecosystem.”

Follow @SundayWorldZA on Twitter and @sundayworldza on Instagram, or like our Facebook Page, Sunday World, by clicking here for the latest breaking news in South Africa. To Subscribe to Sunday World, click here.

Sunday World

Author


Latest News

Sponsored Content