There is a great need for the Small, Medium and Micro Enterprises (SMMEs) Grading system in the South African market. This is according to the Acting Chief Executive Officer of the National Empowerment Fund (NEF), Mr Mziwabantu Dayimani. Dayimani expressed optimism for the SMME Grading system concept that has been geared to not only improve the ability of SMMEs to access credit but to also increase their global competitiveness and boost exports.

Dayimani was speaking during a webinar on the SMME grading that was hosted by the Department of Trade, Industry and Competition (the dtic) under the theme: Changing the landscape of South Africa’s Township Economy with the SMME Grading Concept.

According to Dayimani, the tool will greatly assist with due diligence purposes. He said a lot of businesses that the NEF supports do not have the necessary background information and intelligence on products that have been proposed, that are being included in the tool.

“We are encouraged by the fact that the tool has been tested in other continents and we are watching closely the work that is being done in Nigeria. We believe that this is something that can work in the South African context. This tool will go a long way in ensuring that SMMEs receive financial support timeously. 80% of the funding applications that the NEF receives get declined because applicants are not ready for funding and not in a position to provide all the needed information. We therefore anticipate that with the utilisation of the tool, the success rate of the applications in the South African market will triple, considering the results of other jurisdictions,” said Dayimani.

He added that the tool was catalytic and will certainly assist in vetting businesses and in terms of the governance processes. He said they would also be able to see the areas that need further improvement in businesses.  Dayimani also said the NEF was 100% aligned to the tool and the thinking behind it, and looking forward to test the tool with businesses.

While addressing the same session, the Director of Economic Infrastructure and Logistics at the dtic, Mr Thami Klassen said his department was excited about the opportunity to work with a team of experts and ensuring that the programme is implemented in South Africa.

the dtic is currently conducting a probing survey to determine whether there is a demand for the creation of an SMME grading system. the dtic-led grading system will provide grading’s to SMMEs across South Africa and will have the primary objective of decreasing the information asymmetry inherent with these businesses. These grading’s will then open up business and funding opportunities for SMMEs, and the concept has been proven to be successful in this regard within the countries in which it is available. It is important to note that the concept is not currently available in South Africa but is available in countries such as France, where it is a public sector-led initiative,” said Klassen.

Assistant Professor at Harvard Business School, Anywhere Siko said a Public Sector Rating Agency could provide low-cost inclusive rating services to enterprises, this he said, could thrive and grow the economy.

The Managing Director of Credit Rating Analytics, Mr Saveshen Pillay, whose firm has previously advised the World Bank Group on the concept and formulated the emerging market public sector solution, believes that the grading system will be a game-changer within the South African SMME ecosystem. Credit Rating Analytics is currently advising the Nigerian government to create Africa’s first public sector SMME grading system and can use the expertise gained from that initiative to make this a reality in South Africa.

“In the Nigerian project, our modelling indicates that these grading’s can conservatively add $28 billion to Nigerian economy over the first five years. If we can successfully implement this in South Africa, it will proliferate the country’s economic trajectory and address key socio-economic challenges such as unemployment,” said Pillay.


Bongani Lukhele – Director: Media Relations
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Issued by: The Department of Trade, Industry and Competition (the dtic)
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