Africa-Press-South-Africa<\/p>\n
SMEs are the lifeblood of the SA economy \u2013 they make up a fundamental part of our nation, driving innovation, providing unique products and services and reaching people in ways that larger companies cannot.<\/p>\n
Over the past year, SME owners have demonstrated that they are extraordinarily resilient, adaptable, and innovative.<\/p>\n
Despite their best efforts, small businesses have borne the brunt of the pandemic\u2019s ruthlessness, with the sector having sacrificed more than two million jobs.<\/p>\n
Unfortunately, we\u2019re not out of the woods yet. The economic damage inflicted by Covid-19 will continue indefinitely and for some, the impact will be irreversible.<\/p>\n
At Xero, our research indicates that small business owners are still experiencing profound uncertainty, with 68 percent citing economic instability as their biggest challenge. The pandemic, energy crisis, and limited access to digital technologies have understandably exacerbated their anxieties.<\/p>\n
Ahead of the state of the nation address, the SME community will be looking to the government to provide some much-needed guidance and resolve to help fight against the economic slow-down.<\/p>\n
The SA economy needs healthy SMEs to thrive, and President Ramaphosa must ensure that support for them is central to the government\u2019s strategy.<\/p>\n
Late payments and an ombudsman office<\/p>\n
Life as a small business owner can be tough at the best of times. One of the biggest threats is any disruption to cashflow. Our research shows that 47 percent of South African SMEs cite cash flow issues and late payments as two of the biggest obstacles to their growth.<\/p>\n
The SME community is concerned about the government\u2019s newly proposed regulatory framework that would see the appointment of an ombudsman to oversee the regulation of SA\u2019s small, medium and micro enterprises (SMME) industry to address issues like late payments.<\/p>\n
We need to see a bolder and enforceable approach to break the impasse on late payment. This is going to need a combined effort from big corporates, technology firms, government and behaviour change amongst SMEs too.<\/p>\n
That\u2019s why we support the call from organisations like the Small Business Institute, BLSA and the SA SME Fund for regulation that would speed up payments for small businesses to within 30 days, and for an increase on the current R20,000 limit for claims to pass through the small claims court.<\/p>\n
Tech adoption support<\/p>\n
President Ramaphosa emphasised the digital economy as a driver of job creation and business growth in his 2020 address. The appointment of a presidential commission to oversee fourth industrial revolution (4IR) initiatives further clarified the government\u2019s intentions.<\/p>\n
Unfortunately, the pandemic put paid to those good intentions. Although many businesses have turned to tech to survive during Covid, there is still much more the Government could be doing to incentivise tech adoption and make it a key driver in the country\u2019s economic recovery.<\/p>\n
We\u2019ve seen how instrumental tech has been in SME growth. Adoption of tech like cloud accounting has surged in recent years from 13 percent of SMEs using it in 2017 to 61 percent in 2020. This is a clear indication that most businesses can now manage their finances remotely.<\/p>\n
There is clearly a strong hunger from small businesses to adopt new tech, but we all need to work together – government, the private sector, tech companies, banks – to ensure they have the right digital tools and skills to use them.<\/p>\n
Access to funding<\/p>\n
Last year the government announced Covid support, including a R200bn scheme to fund banks to make low-interest loans to businesses to help protect jobs and spur on the economy. However, there has been relatively low uptake of these loans from small businesses. Towards the end of last year only 10-20 percent of those loans had been deployed.<\/p>\n
It would be great to see the government consider adding \u2018alternative lenders\u2019 to the scheme to augment the financing options offered by traditional banks.<\/p>\n
Having a blended approach of using traditional banks alongside fintechs\/alternative lending platforms like Bridgement, Retail Capital and Lulalend will help to increase access to efficient and affordable funding. This would mean more options for SMEs that better represent what they need. Alt lenders can also connect directly with cloud accounting platforms to review a business\u2019s financial position in real-time, helping to reduce admin time.<\/p>\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
Africa-Press-South-Africa SMEs are the lifeblood of the SA economy \u2013 they make up a fundamental part of our nation, driving innovation, providing unique products and services and reaching people in ways that larger companies cannot. Over the past year, SME owners have demonstrated that they are extraordinarily resilient, adaptable, and innovative. Despite their best efforts, […]<\/p>\n","protected":false},"author":84,"featured_media":3326,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[315,384],"class_list":["post-4287","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-africa-press-south-africa","tag-sona-2021"],"yoast_head":"\n