South Africa’s small business sector is in deep distress, with nearly half of all small enterprises at risk of closing within the next 12 months. That’s according to the latest Small Business Growth Index, which paints a sobering picture of the challenges facing entrepreneurs in the country.
The findings highlight a sector plagued by red tape, limited market access, and a lack of financial support—issues that are putting immense pressure on small business survival.
“A lot of businesses reported that the environment in which they operate is very constrained,” said Professor Carel van Aardt, lead researcher on the index. “They are struggling under a weight of regulation and administrative red tape.”
In addition to bureaucratic hurdles, access to finance remains a critical challenge. Many small businesses cited difficulties in securing funding to grow or even maintain their operations.
What stands out, van Aardt noted, is the overwhelming call for government support. “Over 50% of respondents say they’re not getting the support they need from the state. This, coupled with the risk of mass closures, makes the need for intervention urgent.”
The index comes at a time when small and medium-sized enterprises (SMEs) are seen as crucial to job creation and economic recovery in South Africa. Yet without targeted support and structural reforms, experts warn the country could see a significant contraction in this vital sector.