I always get asked what it will take for South African SMEs to stay resilient and grow despite ongoing global uncertainty and local pressures. If you ask any small business owner today, the answer is simply grit. But this alone, while admirable, is not a growth strategy. Nor is it enough to keep the backbone of our economy from breaking.
New research released this week confirms what’s been keeping many of us in the sector up at night. South Africa’s SMEs are in real danger. The inaugural Small Business Growth Index (SBGI), developed by Absa Business Banking and the South African Chamber of Commerce and Industry (Sacci), reveals that more than half of our SMEs are in decline, under severe distress, or at risk of closure. Even more worrying is that more than 55% don’t believe they’ll survive the coming year.
That’s not a red flag. It is a full-blown economic emergency.
And yet nearly 80% of these very same SMEs still plan to invest in their own businesses. That says something powerful about how the entrepreneurial spirit in South Africa is not dampening, despite the relentless pressure of rising costs, unreliable infrastructure and shrinking market confidence. Unless we match that spirit with targeted support, access to new markets and real financial backing, we will continue asking small businesses to carry the economy without giving them the tools to do so.
The pressure on SMEs isn’t just domestic. With South Africa now facing hefty US tariffs of 30% on key exports, some 30,000 jobs are at risk. As the government scrambles to secure new markets in Asia and deepen intra-African trade, we must ask whether our SMEs are ready to seize these opportunities. Right now, the answer is no, and not because they lack drive but because they lack infrastructure, funding and consistent access to value chains.
The truth is that we cannot keep treating SMEs as an afterthought. They are not a side hustle to the formal economy but the beating heart of it. Over 90% of businesses in South Africa are SMEs, and they employ about 60% of our workforce. So when more than half of them are under threat we’re not just talking about business closures but the collapse of livelihoods, communities and the country’s broader economic trajectory.
Support must be fit for purpose. Traditional finance models do not work for most small businesses, with rigid lending criteria, red tape and long delays forcing many SMEs to give up before they even apply. We need flexible, blended finance options such as grants, low-interest loans and revenue-linked repayment plans that are paired with the kind of practical training that turns funding into growth.
This is not about rescuing struggling businesses. This is about building an inclusive economy that recognises the value of its smallest players
The playing field itself needs levelling out, and this requires financial literacy. SMEs need reliable infrastructure like roads, electricity and internet to function. They need fast and fair access to supply chains, especially in sectors such as agriculture, textiles and automation that are highly exposed to global market shifts. They also need large corporations to pay them on time and procure from them regularly. The days of paying lip service to supplier development while squeezing smaller players out of the game must end.
There are positive signs. Initiatives like the Small Business Ambassador Programme, driven by the SBGI partners, are creating space for entrepreneurs to access market insights and shape policy dialogues. Some South African banks are also coming to the party, refining their SME offerings to meet businesses where they are. However, the momentum is still too slow. What we need now is urgency.
This is not about rescuing struggling businesses. This is about building an inclusive economy that recognises the value of its smallest players. The resilience is already there; the data proves it. Despite overwhelming odds, SMEs are still fighting, still investing, still trying to grow. What they need is reinforcement.
If we get this right, we don’t just help small businesses survive — we let them lead the charge in rebuilding our economy. It takes courage from the government, commitment from corporations, and fewer hoops from funders.
The time for glossy reports and buzzwords is up. SMEs are already doing the heavy lifting, often with less fanfare and more grit than most. For the rest of us? It’s time we showed up too. Let’s stop talking and start doing before we lose the very businesses holding everything together.
• Mtwentwe is MD of Vantage Advisory and host of the SAICA Biz Impact podcast
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