Entrepreneurs are struggling to reconcile advertised banking benefits with the actual cost of managing their finances.
According to data from the Small Enterprise Development Agency (Seda), only 12% of South Africa’s SMEs access formal funding, meaning many rely on day-to-day banking rather than credit.
But this essential service is far from affordable. A 2024 report by Business Unity South Africa found that SMEs spend an average of R700 to R1200 per month on bank fees, which is a substantial burden for businesses with thin profit margins.
Neo Dlamini, who runs a small logistics company in Soweto, said the true cost of banking became clear when he compared his monthly statements.
“I use one of the big four banks and thought their SME account was supposed to save me money. But when I looked closer, I was being charged for every debit order, every notification SMS and even for withdrawing cash,” he said.
“These charges add up to over R1000 monthly, and that’s the same as paying for an extra employee.”
Banks often offer SME packages marketed as cost-effective solutions, but these frequently include hidden charges such as fee-per-transaction pricing, charges for card swipes and steep costs for cross-border payments.
For importers and small-scale exporters, particularly those operating under the C(AfCFTA), foreign transaction fees can climb to as high as 3.5% per payment.
In the recent Gauteng budget tabled by finance and economic development MEC Lebogang Maile, the provincial government emphasised improving payment efficiency to support SMEs, including paying township suppliers within 10 days.
While that may ease liquidity issues, entrepreneurs are concerned about how much of their money is silently absorbed by banks.
South African banks have faced mounting criticism for not tailoring their offerings to the realities of small business owners.
Fintech companies have emerged as an alternative, often promising zero-fee banking or minimal-cost digital wallets. But their reach remains limited.
A study by FinMark Trust found that while 68% of SMEs are aware of fintech platforms, only 22% trust them enough to use them for core banking needs.
Dlamini said he considered switching to a fintech platform but was discouraged by the need for stable internet, limited ATM access and delayed support responses.
“It sounds good in theory, but when you’re trying to run a business that needs daily access to funds and support, it becomes risky,” he said.
Business analysts argue that without stricter regulation and greater transparency from traditional banks, small businesses will continue to suffer.
“There is a glaring gap between the banking sector’s public commitments and the lived experiences of entrepreneurs,” said independent financial analyst Lerato Mahlangu.
“We need clearer fee structures, digital literacy programmes and real-time cost calculators to empower small business owners.”
The cumulative impact of hidden fees cannot be underestimated. For the average SME, annual banking costs can exceed R14,000 which is enough to invest in equipment, staff, or marketing.
