SMEs – South Africa’s Future is in your hands

Apr 15, 2016 Blog  RainFin , SME

Alone we can do so little; together we can do so much. 

                                                                                                               – Helen Keller

A recent report by South Africa’s National Development Plan states that by 2030 90% of jobs will be created by SMEs and emerging businesses.

Does that sound like an ambitious figure? Well, that reaction is not unfounded. A recent study by SiMODiSA Association identified 25 ‘blockers’ for entrepreneurs in South Africa. Since then, SiMODiSA have led a movement, engaging government decision-makers, departments and agencies to work together to make the landscape more accommodating for SMEs and emerging businesses.

By emerging businesses, we mean those across all industries who find themselves in the early incubation stages through to the intermediate acceleration stages of the business life cycle. This includes companies with revenues of <R1m per annum to R100m per annum and aged between one and ten years.

PwC recently sought to address some of the myths surrounding the aforementioned blockers. The top three myths being:

1. Obtaining funding is the biggest challenge
2. Red tape is the largest blocker to SME development
3. The Main inhibitor is cash constraints

Funding is the biggest challenge – results suggest that SMEs cite market access, not funding, as the largest commercial challenge.

Red tape – while this is acknowledged as a blocker – SMEs rank this as number four out of ten with only 9% of respondents citing this as an issue.

Main inhibitor is cash constraints – of all of the myths it was found that this one was in fact true!

So what is the solution? – Andrea Bohmert, Director at Knife Capital suggests that

The funding gap for entrepreneurs in South Africa has more to do with packaging investment opportunities in a way that is accessible to risk funders than it is about the complete lack of funding availability.”

Introducing RainFin. RainFin is South Africa’s first and leading lending marketplace offering you a convenient, fast, flexible, innovative and trusted way to borrow and lend money. RainFin’s approach enables SMEs to access business loans of between R10 000 and R750 000. Until this point SMEs looking for this level of funding have been restricted to expensive options e.g. Invoice Factoring and Merchant Credit Advances (MCAs). This is because it has been prohibitively costly for incumbent financial institutions to service the needs of these SMEs – the result being that cash-flow problems are compounded further when businesses are forced to opt for limited and expensive solutions.

RainFin’s credit marketplace facilitates access to safe, sustainable borrowing and lending; without traditional barriers to use. To find out how you can benefit from becoming a member of the RainFin community watch our video or visit

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