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The South African Chamber of Commerce and Industry yesterday gave evidence to the Parliamentary Portfolio Committee on Economic Development during the hearings on SME Access to Finance.

In its submission SACCI pointed out that access to finance was only one of the impediments to SME development in South Africa. SACCI stated that urgent attention to the sector was necessary because the economic crises had intractably harmed it and prospects for employment recovery following the global downturn in the short term were low. Liquidation figures remained obstinately high and the businesses currently being lost were previously healthy enterprises. In addition to encouraging the establishment of new businesses, "repair" of the SME sector could be facilitated by the movement of informal operations into the formal sector. Local government business retention and expansion programmes could be harnessed to improve SME sustainability. SACCI believed that a vibrant SME sector was necessary for the successful implementation of the recently announced national growth plan while

SACCI drew attention to the challenges and impediments that SMEs faced which included a restrictive regulatory burden, lack of understanding and/or trust in banks and insurance companies resulting in attempts to self-finance start ups, bank requirements for collateral which SMEs had difficulty in finding, cash flow problems resulting from slow receipt of payments and intimidating procurement procedures.

SACCI also drew attention to the programmes offered by chambers of commerce that cover the movement of informal businesses into the formal sector, training and business linkages, advice on the development of business plans and access to finance.

SACCI stressed the need to align national strategies such as the new growth plan and incentives to make access to products and services easier so as to facilitate the growth and to improve the sustainability of SMEs.