Slow economic growth is throttling the development of small and medium enterprises and lending by the major banks to black-owned small businesses shrank by 7.7% between 2016 and 2017, according to figures from the Banking Association South Africa .
Lending to SMEs has remained a problem and their number has stagnated for the past 10 years, Basa’s head of financial inclusion, Khulekani Mathe, says. “Banks do debt finance; they don’t do venture capital finance and no business, let alone an SME, can survive on debt finance alone,” he adds. Although there has been growth in certain other areas of transformation in the sector, such as lending for affordable housing, Basa concedes improvement is needed in other areas.
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