For the last 3 years there has been a greater recognition of Micro, small and medium size businesses around the globe. The United Nations has declared the 27th of June as a day to publicly drive awareness of their contribution to sustainable development worldwide. The annual celebration, known as World MSME Day, is now a regular occurrence across several countries and continents.
Why the recognition of small to medium size businesses?
On a number of fronts SMEs need significant support. Raising awareness for them globally is an initiative to help highlight their contributions as well as their greatest needs. By increasing awareness of their specific challenges we can begin to address them and help drive further business growth and sustainability.
According to researchers it is estimated that in South Africa, SMEs make up 91% of formalised businesses, providing employment to 60% of the labour force and contributing to roughly 34% of the GDP. These businesses are what drive and foster technology and innovation, positively impact the communities around them through job creation and provide the platform for local growth.
The greatest challenges facing South African SMEs:
Research into SMEs in South Africa regularly highlights the most significant obstacles to growth businesses of all kinds face are:
- Securing finance
- Upskilling and training employees
- Tax regulations and requirements
These on-going barriers hinder SMEs from reaching their true potential. Leaving them vulnerable and susceptible to stunted growth despite them being one of the biggest contributors to job creation and economic development.
What can be done to help our SMEs?
Expanding the options SMEs have to secure funding is essential.
The primary challenge for SMEs remains access to finance, and this has a ripple effect on other business needs. Access to working capital allows for the other challenges to be met and addressed over time.
But without this initial access growth can grind to a halt when:
- equipment can’t be purchased
- new hires can’t be made
- businesses can’t promote their products and services
- inventory can’t be purchased to continue making sales
SMEs are often denied access to finance because traditional lenders see them as too high a risk. These lenders often require collateral that small business owners don’t have to put down as surety. Or the time and red tape required to apply for a loan is just too prohibitive for SMEs that need to move quickly.
With the growth of alternative lending fintech companies, such as Lulalend, who understand and tailor their services to SME customers we will be able to open up access to business financing.
At Lulalend we cater to the needs of the SME businesses that are the driving force behind our economy. We offer access to finance that is uncomplicated and immediate. Business owners can turn to us for funding to maintain cash flow and access working capital to drive growth.
Businesses like New Earth Recycling, owned by Noel Ehrenreich, were able to access fast, easy funding of up to R1 million through Lulalend. With this finance Noel was able to expand and grow his business through the purchase of raw materials, hiring new staff and taking on new business opportunities. Noel’s business isn’t the only one that has benefited from access to finance with Lulalend. You can find out more about other businesses we have been able to help sustain and grow on our customer testimonials page.
Because we’ve seen first hand the impact access to finance can have on the businesses we’ve supported, Lulalend is a huge supporter of World MSME Day. We celebrate this initiative along with the local businesses who are making significant contributions to our country.
We thank them for all their endeavour, ingenuity and on-going persistence under adversity.