Johannesburg hosts Global SME Finance Forum alongside G20 proceedings

Miguel da Silva, Group Executive: Business Banking at TymeBank, examines the developments affecting South Africa's SMEs as international finance leaders gather in Johannesburg.

The Global SME Finance Forum takes place in Johannesburg from 15 to 17 September, bringing together more than 1 200 participants from over 60 countries and 240 financial institutions.

As an official side event of the G20 South Africa Presidency, the forum promises unique access to international funding solutions and market opportunities for South African SMEs.

The forum's focus on market access aligns particularly well with South Africa's urgent need to diversify its export relationships and funding sources.

With global economic uncertainties persisting and traditional funding channels becoming increasingly constrained, we should look forward to the forum's roundtables and breakaway sessions that offer direct engagement with international lenders actively seeking emerging market opportunities.

Participants will explore innovative financing mechanisms, including blended finance structures and guarantee programmes that could unlock previously inaccessible capital for local businesses.

The concentrated presence of decision-makers from major development finance institutions and commercial banks represents a rare window for securing expansion capital and establishing international partnerships. TymeBank’s CEO will take part in a panel featuring financial services disruptors who have transformed their markets through innovative technology and customer-centric approaches.

SME Jobs Fund bolstered by pension-fund contribution

A collaboration between National Treasury and the pension fund industry has successfully mobilised almost R1 billion for SME financing, suggesting a scalable model for addressing South Africa's persistent funding gap.

The initiative leverages R90 million from Treasury's Jobs Fund to attract R900 million from pension funds through an innovative risk-mitigation structure.

The funding mechanism, implemented through Ashburton Investments, addresses pension funds' traditional reluctance to engage with perceived high-risk SME lending.

By positioning Treasury's contribution as first-loss capital within an independent trust structure, the arrangement provides sufficient risk absorption to meet pension fund boards' fiduciary requirements.

This 10% buffer effectively transforms the risk profile of SMME lending, making it palatable for institutional investors managing R19.8 trillion in household wealth.

This funding round specifically targets high labour-absorption sectors including the green economy, sustainable agriculture, waste and water management, and the informal economy. Prior rounds have resulted in the jobs fund disbursing R7.4 billion, which has created 210 719 permanent positions and 114 534 temporary roles while supporting over 63 000 SMEs.

SARB navigates new inflation territory as global central banks convene

The South African Reserve Bank's Monetary Policy Committee meets on 18 September, marking the first decision under the newly revised 3% inflation target. July's annual consumer price inflation accelerated to 3.5% from June's 3%, reaching its highest level since September 2024.

This upward trajectory, already breaching the new target, suggests that Governor Kganyago and the committee face limited room for manoeuvre.

The recalibrated monetary policy objective creates a fundamentally different landscape for SME financing and operational planning.

SMEs hoping for further rate relief to ease working capital pressures may need to adjust their expectations and financing strategies accordingly.

The timing of the SARB's decision gains additional significance as it coincides with rate announcements from both the US Federal Reserve and the European Central Bank. These synchronised monetary policy decisions will collectively shape global capital flows and exchange rate dynamics, directly impacting South African SMEs' import costs and export competitiveness. The rand's performance against major currencies in the wake of these announcements will be watched carefully by businesses with international exposure.

AGOA expiration threatens established export channels

The African Growth and Opportunity Act reaches its expiration date in September 2025, potentially disrupting trade relationships that currently account for 35% of South African exports to the United States.

This deadline arrives in an already strained trade environment, following the implementation of 30% US tariffs earlier this year.

Export-oriented SMEs face a double challenge: the immediate uncertainty around AGOA renewal and the compounding effect of existing tariff barriers.

Manufacturers in the automotive components, agricultural products, and textiles sectors must now accelerate their contingency planning. The absence of AGOA preferences would eliminate duty-free access for thousands of product lines, fundamentally altering the economics of US-South Africa trade.

Business confidence indicators chart the course ahead

The third quarter's comprehensive suite of confidence indicators offers SMEs useful intelligence for strategic planning.

The RMB/BER Business Confidence Index provides sentiment readings across manufacturing, retail, wholesale, building, and motor trade sectors, enabling businesses to benchmark their own performance against broader industry trends.

The FNB/BER Building Confidence Index on 10 September offers early insights into construction and infrastructure activity, while the Absa Manufacturing Survey following on 16 September provides a useful perspective given the sector's role in employment and export generation.

Fuel price relief offers operational respite

September brings welcome news for transport-dependent businesses, with fuel prices expected to decrease on the back of lower crude oil prices and relative rand strength.

For logistics companies, manufacturers, and service businesses with significant vehicle fleets, these reductions translate directly into improved cash flow and margin recovery.

The timing of this relief, coinciding with the typically busy fourth-quarter trading period, should enable businesses to rebuild working capital reserves depleted by earlier cost pressures.

In more welcome transport-related news, Transport Minister Barbara Creecy has announced that conditional rail slots have been awarded to 11 private operators – a milestone in government’s efforts to reform the freight-rail sector.

There’s still a lot to do before new wheels hit the tracks, but the prospect of revitalised transport and logistics infrastructure should give SA SMEs a glimmer of optimism.

Miguel da Silva, Group Executive: Business Banking at TymeBank.

BUSINESS REPORT