OPINION - The importance of data to enhance South Africa’s SME Ecosystem

South Africa’s small and medium-sized enterprises (SMEs) carry the weight of the economy. They employ most of the workforce and make up more than a third of Gross Domestic Product (GDP) - but anyone who has tried to run one knows how tough the environment is. Failure rates are high, access to finance is limited, and breaking into markets is harder than it should be.

The ripple effects are serious. Because so many SMEs struggle with basic compliance and reliable reporting, funders price them as risky. Loans are often offered at 18% to 25% interest, which makes borrowing almost impossible for a business that needs affordable capital to grow. On top of that, across Africa, the trade-finance gap is estimated at US$100-120 billion, leaving many businesses unable to access the working capital they need.

Plenty of talk, not enough data

We don’t have a shortage of initiatives aimed at helping SMEs. Every year, new incubators, accelerators and government support programmes are launched. But despite all the good intentions, very little has changed in the lived experience of small businesses.

One of the big reasons is that we don’t have enough reliable data about the health and profitability of SMEs across different sectors and regions. Without that information, it’s very difficult for funders to assess risk properly. It also makes it hard for corporates to measure whether their supplier development spend is having an impact, or for policymakers to design interventions that actually work.

The result is that finance stays expensive, resources are often misallocated, and many SMEs continue to fail.

Why better data is the starting point

If we are serious about building a stronger SME ecosystem, we need to start with data. Funders cannot take on risk they don’t understand, and SMEs cannot prepare for funding if they don’t know what gaps they need to close.

This is where platforms like SME Snapshot™ come in. By linking directly with accounting systems like Xero, QuickBooks and Sage, the platform gives business owners a clear, real-time picture of their financial health. Instead of working off spreadsheets or relying on guesswork, SMEs can track turnover, profit, cash flow, debtors and creditors in one place. They can also stay on top of compliance deadlines for VAT, income tax and annual returns.

The real value lies beyond the individual business, cause Snapshot can aggregate data across supply chains, sectors and even geographies, it creates insights that are useful not only to entrepreneurs but also to funders, corporates and policymakers. That kind of visibility is what the ecosystem has been missing.

From uncertainty to trust

At its core, the SME funding challenge is a trust problem. Funders worry about risk; SMEs feel locked out of opportunities. Reliable, real-time data helps bridge that gap. It shows funders that businesses are on top of their numbers, and it helps SMEs understand what they need to fix to become investable.

It also means that governments and corporates can move past the rhetoric of “supporting SMEs” and actually back their words with measurable outcomes. Better data allows everyone in the value chain to make decisions based on facts, not assumptions.

Unlike accounting systems such as Xero, Sage or QuickBooks, which focus on record-keeping and compliance, SME Snapshot interprets that data to show how funders will view the business. It connects the dots between day-to-day financial management and long-term funding readiness. By translating financial data into insights on performance, liquidity, and risk, Snapshot helps SMEs understand how to strengthen their position, and gives funders and corporates a clearer view of which businesses are truly investment-ready.

Unlocking potential … and funding

South Africa talks a lot about the importance of SMEs, but too often the support remains theoretical. If we want to move the needle, we need to make funding more accessible and less costly, and that starts with better information.

SME Snapshot isn’t the silver bullet, but it’s one of the tools that can help us get there. By giving SMEs visibility of their own numbers and aggregating insights across the ecosystem, it builds the foundation of trust that’s needed for meaningful growth.

If we unlock the data, we unlock the potential.

For media interviews:

Emma Montocchio - Decusatio Investor Communications

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Tel: 010 745 2204