Access to external funding by small businesses in South Africa has shown significant improvement and entrepreneurs are now changing their attitude towards banks‚ according to a survey.
The Nedbank Small Business Index (NSBI) has for the last quarter of 2014 shown an improvement in the ease of obtaining finance‚ which it said was at a record high.
The percentage of SMEs seeking bank finance now stands at 91% and only 7% targeted private investors.
The high number of SMEs complaining about access to finance had become a major talking point on small business development in South Africa. But SMEs were now reporting a net increase in access to bank loans and overdrafts.
Busi Radebe‚ economist at Nedbank who is also involved in preparation of the index‚ said not only were business owners considering applying for finance to expand their operations, but they were also astute at handling their finances.
‘The index also revealed that 48% of respondents are planning to make some form of capital expenditure over the next 12 months‚ the highest reading we have seen last year. This is down significantly from 53% recorded at the same time in 2013; but we are pleased to note that sentiment is moving in the right direction‚’ Radebe said.
Business strategist Muriel Chinoda‚ MD of Business Engines‚ said studies in many developing countries pointed to a positive correlation between financial development and access to finance.
The survey also noted that government was reducing the compliance burden on smaller businesses‚ which was also a positive move for small business development.
Presenting the 2015-2016 national budget in February‚ Finance Minister Nhlanhla Nene announced a turnover tax break for companies with an annual turnover below R335000. Such companies will not pay Companies Tax.
Commenting on the tax relief, Radebe said: “Any tax relief for small businesses could help to drive job creation among these enterprises and boost efforts on finding ways to stimulate sustainable growth for businesses.” — I-Net Bridge
Finance made easy for SMEs
The Nedbank Small Business Index (NSBI) has for the last quarter of 2014 shown an improvement in the ease of obtaining finance‚ which it said was at a record high.
The percentage of SMEs seeking bank finance now stands at 91% and only 7% targeted private investors.
The high number of SMEs complaining about access to finance had become a major talking point on small business development in South Africa. But SMEs were now reporting a net increase in access to bank loans and overdrafts.
Busi Radebe‚ economist at Nedbank who is also involved in preparation of the index‚ said not only were business owners considering applying for finance to expand their operations, but they were also astute at handling their finances.
‘The index also revealed that 48% of respondents are planning to make some form of capital expenditure over the next 12 months‚ the highest reading we have seen last year. This is down significantly from 53% recorded at the same time in 2013; but we are pleased to note that sentiment is moving in the right direction‚’ Radebe said.
Business strategist Muriel Chinoda‚ MD of Business Engines‚ said studies in many developing countries pointed to a positive correlation between financial development and access to finance.
The survey also noted that government was reducing the compliance burden on smaller businesses‚ which was also a positive move for small business development.
Presenting the 2015-2016 national budget in February‚ Finance Minister Nhlanhla Nene announced a turnover tax break for companies with an annual turnover below R335000. Such companies will not pay Companies Tax.
Commenting on the tax relief, Radebe said: “Any tax relief for small businesses could help to drive job creation among these enterprises and boost efforts on finding ways to stimulate sustainable growth for businesses.” — I-Net Bridge
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