SME DEVELOPMENT
Development Finance Insitutions (DFIs ) should
be developmental, through working with banks to
address dysfunctional markets, instead of competing
with the banks.
are attributed to a number of challenges, including a poor education
system in the country, difficult labour laws, corruption and nepotism.
On the issue of funding, the Global Entrepreneurship Monitor
report believes there is sufficient funding for SMEs but suggests the
challenge is that the available finance from both private and public
institutions is not made easily accessible for new and growing firms.
The report also finds that the finance that is available ‘comes at
very high cost’.
‘Finance was cited by 43% of the experts as one of the three most
constraining factors to developing entrepreneurship,’ the report states.
Efforts have been made to actively address the concerns around
funding: The Banking Association notes that banks currently provide
about 95% of all funding to SMEs.
‘Banks financed black SMEs in the sum of R15 billion in the
FSC (Financial Sector Code) market from 2003-2008. There is room
for improvement, but there are a number of challenges that affect
Edition 6
Subbed Banker 8 SMEs.indd 27
BANKER SA
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2013/07/18 8:07 AM