By: Ntombi Mandla
A new survey by fintech company iKhokha following the formation of the government of National Unity (GNU) reveals that 79% of SMEs interviewed now feel optimistic about economic growth under the country’s new leadership. iKhokha conducted a similar survey across its national base before the polls on SME confidence and found that 76% of smaller enterprises viewed government support as ineffective in fostering small business growth and development.
“The future looks promising following the formation of the government of national unity. It’s a positive outcome for SMEs and our hope is that the new leadership will help stimulate our economy and create more opportunity for small businesses,” said iKhokha CEO Matt Putman.
The results of iKhokha’s latest survey its in line with SME financier Business Partner Limited who reported that SME confidence in the local economy’s ability to support business growth over the next year stood at 69 percent. This figure represents a 9-percentage point increase from the previous quarter and a 13-percentage point rise compared to the same period last year.
According to iKhokha, retail spending fell by 0.7% in May compared to the previous month, as uncertainty led to more cautious consumer spending. This trend was also evident in the automotive sector, where new car sales dropped by 14.2%. Furthermore, SME turnover decreased by 8% in May and June, as the nation anxiously observed coalition talks in the media, which further unsettled South African sentiment.
“It’s encouraging to witness market confidence returning, the Rand strengthening and reductions in petrol and diesel prices and we hope to see interest rates cuts soon as inflation cools. iKhokha remains focused on helping build our economy by empowering SMEs to navigate this new landscape with the digital tools and support they need to start, manage, and grow their respective businesses,” said Putman.
“This renewed optimism under the GNU is reflected in the adoption of iKhokha’s cash advance product, with the fintech noting a 20% increase in working capital distributions in July. With expectations high for stability and supportive policies, businesses are recommitting to growth initiatives and investing in their futures. Furthermore, iKhokha also reports a 4% increase in small business turnover in SA as of mid-July, compared to figures from June.”
Most respondents are optimistic that the GNU will address the many challenges they encounter, offering them a better opportunity to develop successful businesses, with 78% of them expressing confidence that the new government will represent their interests effectively.
