The National Small Enterprise Amendment Act (2023) established an Ombud for Small and Medium Enterprises to adjudicate disputes between SMEs and large enterprises or government, particularly around payment delays and contract disputes. Late payment by government and large corporates is a major liquidity constraint for small businesses; the average payment period to SMEs from government entities exceeds 90 days, far beyond the legislated 30-day requirement. The Ombud's operationalisation — appointing staff, developing dispute resolution procedures, and publicising the service — was progressing as of early 2026 but remains incomplete. Effective enforcement could recover significant working capital for the SME sector and deter exploitative contract practices. The office complements SEDA's business support role and the Payment of Suppliers regulations under the PFMA, which have had limited enforcement success to date.
National Treasury Instruction 3 of 2021/22 mandated that all national and provincial departments reserve 30% of all procurement contracts for Small, Medium, and Micro Enterprises (SMMEs), township enterprises, and cooperatives—an estimated R120 billion per year in procurement that should flow to small businesses. However, compliance monitoring reveals that most departments meet the target on paper by disaggregating existing contracts and awarding sub-components to SMME subcontractors, without genuinely transferring the supply chain relationship or management capacity. The reform proposes: a reclassification of SMME procurement compliance to require direct prime contracts (not subcontracts) for the 30%, mandatory Supplier Development Plans where large contractors are awarded above-threshold contracts, BizPortal integration with CSD to make SMME registration and procurement participation seamless, and monthly compliance reporting to the PC on Small Business Development. The DSBD's SMME Barometer (2024) estimates that only 18% of the 30% target is achieved through genuine prime SMME contracts. The Jobs Fund impact evaluation (2023) found that supply chain SMME development has the highest employment multiplier of any DSBD programme.
The Government Employees Pension Fund (GEPF), with assets exceeding R2.4 trillion, is one of Africa's largest institutional investors. Its investment mandate has historically been conservative, with infrastructure comprising a small share of the portfolio. The reform involves expanding the GEPF's infrastructure investment mandate — through the Public Investment Corporation (PIC) as its asset manager — to direct 5–10% of assets toward domestic infrastructure including energy, transport, and water. This could unlock R120–240 billion in patient capital for projects with long-term, inflation-linked returns suited to pension liabilities. Governance concerns about PIC's past conduct (Steinhoff, VBS) require robust investment governance reforms as a precondition. The GEPF Infrastructure Fund vehicle and blended finance structures with DBSA are under development. As of early 2026, the mandate revision is under actuarial and regulatory review, with GEPF trustees cautious about concentration risk.
The Two-Pot Retirement System, implemented on 1 September 2024, fundamentally restructured South Africa's retirement savings architecture by dividing all new pension contributions into two components: one-third into an accessible "savings pot" (from which a single withdrawal is permitted per tax year, minimum R2,000) and two-thirds into a "retirement pot" (accessible only at retirement or emigration). The reform addressed the longstanding tension between South Africa's low household savings rate and the economic hardship that historically drove members to preserve fund withdrawals on retrenchment (the primary cause of inadequate retirement outcomes). In the first four months of implementation, SARS and the National Treasury received R10.6 billion in withdrawal tax revenue from 2.1 million fund member withdrawals—indicating the scale of latent demand and the fiscal windfall from the transition. The reform was developed under the Pension Funds Act (amended by the Revenue Laws Amendment Act 2023) and required extraordinary coordination between FSCA, SARS, National Treasury, and all registered pension and provident funds. The PC on Finance BRRRs 2022–2024 document the legislative journey and note the retirement pot's long-term adequacy challenge: low income workers contributing only to the savings pot across short working lives will face severe retirement income shortfalls.
South Africa's Just Energy Transition (JET) Investment Plan commits R1.5 trillion over 20 years to transition away from coal, creating significant commercial opportunities in renewable energy installation, energy efficiency retrofitting, battery storage, and green manufacturing. Most of these opportunities require upfront capital that small and medium enterprises cannot easily access through commercial banks, which apply standard credit criteria penalising early-stage energy companies. The DSBD, in coordination with the Small Enterprise Finance Agency (SEFA), is developing a dedicated JET-SMME Finance Facility providing blended first-loss instruments, technical assistance grants, and revenue-based financing. The facility would complement the International Partners Group's $8.5 billion JET-IP commitments, which are directed primarily at large infrastructure.
The Enterprise and Supplier Development (ESD) element of BBBEE scorecards requires corporations rated above Level 5 to invest 3% of net profit after tax in developing black-owned suppliers and enterprises. Estimated annual ESD investment of R8–12 billion from complying corporations represents a major but poorly managed private sector development finance flow: much ESD spend is directed toward single-year grants, soft-skills training, or preferential procurement clauses that expire with the scorecard cycle, rather than toward multi-year supplier relationship development. The Corporate Linkage Programme reform proposes: restructuring ESD codes to require multi-year supplier development contracts (minimum 3 years), integration of ESD suppliers with the SEDA Supplier Development Hubs and IDC's SME Finance programme, mandatory ESD supplier registration on the Central Supplier Database to create a bankable track record, and a DTI-administered ESD impact measurement framework (currently ESD is self-reported with minimal verification). The PC on Trade BRRRs identify ESD as the BBBEE element with the largest gap between scorecard compliance and developmental impact.
The Small Enterprise Finance Agency (SEFA), a subsidiary of the IDC, provides development finance to SMMEs and cooperatives through direct loans and wholesale lending via microfinance intermediaries. Its R2.5 billion annual deployment has been criticised by the PC on Small Business Development for: over-concentration in working capital (short-term) loans rather than growth capital (equipment, premises, expansion), excessive concentration in Gauteng (55% of portfolio) relative to provincial SMME distributions, high non-performing loan rates (above 30% in several years), and insufficient linkage with the SEDA business support ecosystem. The mandate refocus reform proposes: a 40% minimum allocation to manufacturing and agro-processing (sectors with multiplier effects), dedicated provincial deployment targets aligned with the SMME policy, a non-performing loan recovery strategy that preserves lending capacity, and a blended finance partnership with the Jobs Fund to de-risk equity investments in high-growth SMMEs. The SMME Equity Fund (proposed in the 2024 Budget) would complement SEFA's debt offering.
The South African Innovation Fund (IF), established by the DSIT in 2019 as a blended finance vehicle to commercialise university and CSIR research, completed its pilot phase (R1.4 billion committed to 42 portfolio companies) in 2023. Scale-up to R5 billion by 2027—as recommended by the PC on Science and Technology BRRR 2024—requires: a permanent legislative mandate (the IF currently operates under a company structure rather than a statutory framework), co-investment from the PIC and IDC, stronger deal pipeline from universities (through the Technology Transfer Office network), and a dedicated growth-stage fund for companies that have outgrown the IF's early-stage focus but are too small for IDC commercial finance. The DSIT's STI Decadal Plan 2022–2032 (id=69) sets a 1.5% of GDP R&D target, and the Innovation Fund is the vehicle for translating public R&D expenditure into commercial outcomes. South Africa currently commercialises less than 4% of university patents—the OECD average is 18%.
The Financial Matters Amendment Act and the Insurance Act (18 of 2017) created a dedicated microinsurance licence category to serve low-income households with simple, affordable products (funeral cover, crop insurance, household contents). The FSCA oversees approximately 12 licensed microinsurers and hundreds of cell captive arrangements. The reform agenda addresses: persistently high expense ratios (>60%) in the microinsurance market; exclusionary fine print in funeral policies; integration with SASSA grant payment infrastructure for premium deduction; and the extension of microinsurance to parametric agricultural products for smallholders. The PC on Finance has raised concerns about the Policyholder Protection Rules (PPR) enforcement and debit order abuse targeting grant recipients. Twin Peaks regulation gives both the Prudential Authority (SARB) and FSCA oversight roles.
South Africa's Cooperative Banks Development Agency (CBDA), established under the Cooperative Banks Act (2007), oversees approximately 40 registered cooperative financial institutions (CFIs) with combined assets under R500 million — tiny relative to the formal banking sector. The reform agenda seeks to grow CFIs in township and rural areas to provide affordable savings, credit, and payment services to the unbanked. Proposals include: an amended Cooperative Banks Act to create a tiered licensing framework with lower capital thresholds for community-level savings groups; SARB supervisory ring-fencing for CFIs below R50 million in assets; blended finance first-loss facilities through the IDC; and integration with the Post Bank's township payments infrastructure. The FSD Africa and UNCDF have co-funded pilot CFI capacity programmes in KZN and Gauteng townships.
The Land and Agricultural Development Bank (Land Bank) entered a debt standstill in 2020 after a R5 billion guarantee call triggered a liquidity crisis. Government provided R10 billion in recapitalisation between 2021 and 2024, restructured the loan book, and replaced board and management. The strategic refocus targets a shift from commercial farmer financing (previously 85% of the book) toward emerging Black farmers, smallholders, and agri-processing enterprises under the DALRRD's land reform programme. The Land Bank Amendment Act (2023) clarified its development mandate and SARB exemption status. Key challenges: non-performing loan legacy, procurement of agricultural insurance, and integration with Blended Finance instruments (USAID, DFI co-funding). Parliament's PC on Agriculture has monitored the turnaround, noting improved liquidity but ongoing NPL concerns.