Access to funding remains one of the biggest barriers holding back small business growth in South Africa, despite a wide range of government, private sector and community-based support programmes available to entrepreneurs.
For many business owners, the challenge is not only getting funding, but also understanding where to access it and how to successfully apply.
KwaMashu spaza shop owner Ntokozo Msomi, owner of Manzini Tuck Shop in KwaMashu Hostel Block A, is among entrepreneurs who have managed to secure funding support to grow her business.
She has been running her spaza shop for 15 years while facing ongoing challenges such as theft, break-ins and stock losses.
“I started this business a long time ago. Like any other business, it has had ups and downs. There are times when I tried to rebuild and grow, but challenges set me back,” she said.
Her experience reflects both the opportunities and difficulties faced by many township entrepreneurs.
Msomi said support received through a Spaza Shop Support Fund programme helped her remain in business during a period of low stock and declining sales.
“In fact, it is because of the stock I received that I am still able to operate today,” she said.
Msomi received R40,000 worth of stock support through the programme after applying with basic business documents, including her ID and proof of address.
She later submitted additional supporting documents as part of the verification process before final approval by the Small Enterprise Finance Agency (SEFA).
As part of the support package, she also received a point-of-sale till system, which helped her track daily sales and improve record-keeping.
State funding remains a key support system
The Department of Small Business Development (DSBD) provides grant programmes and support initiatives to assist SMEs with growth and sustainability.
The Small Enterprise Finance Agency (SEFA) provides loans to small businesses that are unable to secure funding from traditional banks, often targeting early-stage and informal businesses seeking working capital.
The National Empowerment Fund (NEF) supports black-owned enterprises across multiple sectors, focusing on businesses with growth potential and job creation capacity.
The Industrial Development Corporation (IDC) funds businesses in manufacturing, agriculture and infrastructure where projects demonstrate economic viability and employment potential.
The National Youth Development Agency (NYDA) provides grant funding and support to young entrepreneurs aged 18 to 35, particularly start-ups entering the formal economy.
Enterprise and Supplier Development (ESD) programmes run by major corporations such as MTN, Sasol and Shoprite provide SMEs with funding, mentorship, training and access to procurement opportunities within corporate supply chains.
Private and development funding options
Beyond government support, private development funds also play a role in supporting SMEs.
The Masisizane Fund, backed by Old Mutual, provides financing to formal and informal businesses, with a focus on rural and peri-urban areas, particularly in agriculture, franchising and supply chains.
Technology-focused entrepreneurs can access funding from the Technology Innovation Agency (TIA), which supports early-stage innovation and startup development.
Corporate support and supply chain opportunities
Large companies support SMEs through Enterprise and Supplier Development (ESD) programmes.
ESD is a B-BBEE initiative that helps grow SMEs through funding, mentorship and access to business opportunities, while integrating them into corporate supply chains to support inclusive economic growth in South Africa.
Companies such as MTN, Sasol and Shoprite use these programmes as part of their transformation and procurement strategies.
Corporate Social Investment (CSI) refers to corporate contributions to social development through funding, services, products or staff time, often in partnership with other stakeholders across different sectors.
programmes also support SMEs through training, incubation and community-based funding.
Some entrepreneurs turn to stokvels, crowdfunding platforms and peer-to-peer lending to raise smaller amounts of capital.
These options are especially useful for businesses that need flexible or short-term funding.
Platforms such as Finfind help connect SMEs with more than 600 funding options across South Africa.
What entrepreneurs need to apply
Most funding institutions require businesses to be registered, tax compliant and supported by financial records and a clear business plan.
Experts say many SMEs miss out on funding because they are not properly prepared, even when opportunities exist.
Keeping simple records of sales, expenses and bank transactions can significantly improve funding readiness.
