Report: There Is A Small Business Funding Readiness Crisis In South Africa

According to the SA MSME Access to Finance Report 2025 , the number of black-owned, women-owned and youth-led businesses have increased since 2018, and are now driving a much larger share of MSME Micro, Small and Medium Enterprises funding applications. Black-owned MSMEs accounted for 83.7 of all funding requests in 2024, a significant increase from 66 in 2018. Likewise, women-led businesses now make up 36.1 of funding applicants, up from 32, and more than 50 of MSME funding requests are from youth-owned businesses. These gains reflect a positive trend toward a more inclusive and representative small business sector in South Africa.

However, these businesses face significant challenges accessing finance, not the least of which is that many of them are not funding ready. This is a key takeaway from the newly launched SA MSME Access to Finance Report 2025. The reports data shows that most micro and small businesses lack basic financial recordkeeping systems a major barrier when seeking capital.

According to the reports findings:

• Only 36.8 have formal financial statements
• Just 24.6 of businesses use a proper accounting system
• A staggering 83.4 operate without a formal payroll system

These gaps in financial documentation underscore why so many smaller businesses struggle to secure funding. Financial recordkeeping is paramount when it comes to funding lenders need to be able to confirm a businesss turnover, track monthly trading activity and validate cashflow projections, amongst other things. While small businesses desperately need capital to grow, they often lack the financial know-how, recordkeeping and compliance required to access it. Without up-to-date books, even viable enterprises are flagged as high-risk by lenders and frequently find themselves shut out of funding opportunities.

Finfind an online fund matching platform for small businesses aims to address this crisis. In a past pilot of a Small Business Funding Readiness Programme, Finfind trained unemployed youth graduates to use a basic financial recordkeeping system and placed them in small businesses to help establish proper financial books and other business compliance. This hands-on support helped participating businesses get on top of their finances, produce financials and position themselves for funding. The 2018 Presidential Jobs Summit initiative created a double benefit young graduates gained practical work experience and post-pilot placement opportunities, while the MSMEs they assisted became financially-fit and funding-ready.