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Cape Town - South African small and medium-sized enterprises [SMEs] have a low level of confidence in the country’s business environment, and the challenge they face to access finance is becoming acute.

This is according to the first-quarter 2017 Business Partners SME Index, which was released on Wednesday.

The survey found that SMEs have an average confidence level of 54 percent that the economic environment will be conducive for business growth in the next 12 months.

On average, SMEs have a confidence level of 46 percent that the ease with which they can access finance will improve, the survey found.

Both indicators were down by five percentage points compared with the previous quarter.

Read also: SMEs see improving opportunities in 2017 


Ben Bierman, the managing director at Business Partners, said that confidence levels had improved slightly since dropping to their lowest levels in the fourth quarter of 2015.

“The latest results, however, demonstrate a desperate need for focused support to drive growth and opportunity among SMEs.

“We noticed an uptick in confidence over the past three quarters, showing that business owners remained upbeat about the commitments made by the public and private sector to drive economic growth in the country,” Bierman said.

When asked whether the government was doing enough to foster the development of SMEs, business owners reported an average confidence level of 37 percent, which was down by three percentage points from the previous quarter.

When asked what they considered to be the biggest challenges facing SMEs this year, owners said that this was cash flow, economic conditions and funding.

The results of the study showed that more and more entrepreneurs were looking for mentors, because the business environment was becoming more challenging.

Fifty-three percent of respondents indicated that that they do not have a mentor; while 25 percent said that they had made use of a mentor regularly, and 22 percent said they had made use of a mentor’s services in the past.

However, 86 percent of respondents indicated that they would consider making use of a business mentor in future, given the challenging economic landscape.

Bierman said that the efforts made by small business would succeed only if big businesses and the public and private sectors worked together to bring about change and foster opportunities for growth.

“The feedback received from entrepreneurs is an affirmation of the support required by local SMEs and the need to create an enabling environment for small businesses. “The South African economy has its work cut out for it, and as much as economic growth has, anecdotally, been laid upon the shoulders of SMEs and entrepreneurs.”

Last week, Lindiwe Zulu, the Minister of Small Business Development, told the World Economic Forum on Africa that small business has an integral role to play in addressing inequality and poverty in the country.