The Department of Trade, Industry and Competition (DTIC) wants to create a more inclusive and supportive environment for small businesses, particularly those operating in the townships through new draft amendments to legislation.
Accessing finance has always been a mountain too steep to climb for many small businesses in South Africa. Micro, Small, and Medium Enterprises (SMMEs) often struggle to secure loans from banks due to limited collateral, weak credit histories, and perceptions of high risk. The result is a dependence on informal lenders, whose exorbitant interest rates can stifle growth and even threaten survival.
On 13 August 2025, draft amendments to the National Credit Regulations under the National Credit Act 34, 2005 were published in Government Gazette No. 53154 for public comment.
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DTIC Minister Parks Tau, said the regulations are not intended to penalise individuals who are indebted to institutions of higher learning, but to open new pathways for SMEs to access affordable finance.
Tau noted that the period for input may be extended to ensure all voices are heard, and that stakeholders will be engaged to clarify any concerns. Interested stakeholders, including consumers, businesses, and industry representatives, are encouraged to submit comments before the closing date on 12 September 2025.
Pretoria based entrepreneur Lerato Maseko, who runs a catering business, the reforms offer a glimmer of hope.
“Most of us can’t even get past the bank’s first line of questioning when applying for a loan. Without collateral, we are automatically excluded, even if we have strong business models. If these regulations can help us get recognised in the formal system, it would change everything for businesses like mine,” said Maseko.
Experts say the reforms are long overdue.
Tshedza Makhaya, an economist specialising in business finance, notes that formal lenders rely heavily on data, yet most SMEs generate too little of it to be considered viable borrowers.
“If the regulations succeed in creating a framework where entrepreneurs can build risk profiles over time, we’ll see a much healthier flow of finance into the sector,” he said.
The draft regulations are open for public comment, with Tau committing to a transparent consultation process. If needed, the period for public input will be extended to ensure all voices are heard.
Thabo Mdluli, a small-scale manufacturer from Soweto, said access to finance has been the single biggest stumbling block for his business.
“If government can unlock this door, SMEs will not only grow but also create jobs in communities where opportunities are scarce,” said Mdluli.
Azwi@vutivibusiness.co.za
