DOING BUSINESS

Big drop in business confidence among South African SMEs, study finds

By our News Team | 2022

Business confidence amongst South African small business owners was decidedly low towards the end of 2021, after a notable increase in the second quarter of last year.

This drop in confidence is according to the recently released Q3 2021 SME Index conducted by Business Partners Limited, a business loan provider that operates in seven countries in sub-Saharan Africa.

The index shows that the confidence which small-to-medium sized enterprise (SME) owners have that their businesses will grow in the next 12 months plummeted from 61 percent in Q2 2021 to only 33 percent in Q3 2021 – a stark contrast with where confidence was during the same period in 2020 (72 percent). The sharp decline can be attributed to multiple market disturbances.

Unfavourable economic conditions, exacerbated by power shortages, a record petrol price hike, the lingering effects of Covid and subdued profits are some of the main driving forces behind this reported pessimism. As expected, the unrest that broke out in two provinces in July 2021 also made its mark on business confidence.

Photo by Thirdman from Pexels

The results of the SME Index align with the November 2021 SACCI Business Confidence Index and the Q3 Quarterly Labour Force Survey conducted by Statistics SA, which reports record-high unemployment.

Cash flow challenges are expected

Commenting on the results of the SME Index, Rayna Dolphin, Executive Director at Business Partners Limited explains: “After taking some significant strides towards economic recovery, we saw a slump in GDP in Q3 2021 – the ripple effect of which we saw in the results of the SME Index. Poor economic conditions and cash flow were the main challenges that SMEs predicted for the next six months. The two of course, are inextricably linked.”

In Q2 2021, the company reported that confidence levels had steadily increased quarter-on-quarter from Q2 2020 – a pivotal period for small businesses who were hard hit by the outbreak of the pandemic and the subsequent imposition of a national lockdown.

For many SMEs, better prospects seemed within reach with the onset of the festive season, but hopes were clouded with the arrival of the new Covid variant, Omicron.

In a media statement, the company says the clear drop in business confidence should be seen within the context of a number of external factors that were the direct cause of disturbances in the market and ultimately, instability for SMEs.

As the SME Index demonstrated, only 44 percent of SMEs report that they are on track to recover some of the profit margins lost in 2020.

We know AI influencers aren’t real – so why do we trust them?

Researchers describe AI influencers as having a ‘dual identity’. Consumers evaluate both ‘person’ and ‘technology’ identities at once.

Hotel receptionist assisting a guest at the check in counter with a gray suitcase nearby behind the desk

Why trust has become a critical asset for hotel industry marketers

Reputation and trust, once modest influences on hotel choice, have become some of the strongest predictors of patronage, study finds.

Three people in formal attire pose for a photo at an awards event a woman in a pink dress holds a trophy while two men in suits stand beside her against a gold confetti backdrop

FNB bank’s eBucks programme dominates the 2026 SA loyalty awards

South African brands are increasingly setting the global benchmark for customer loyalty strategies, organisers say.

Portrait of a man with short black hair and a beard wearing a black button down shirt against a light gray background

Zambia’s strongest creative ideas are emerging from local truths

Global influences among younger consumers are still present, but they are being filtered through a distinctly Zambian lens.

Yellow humanoid robot at a bakery counter inspecting a display of donuts on display in front of glass cases

Consumers have doubts about products when they’re designed by AI

Researchers find that lack of perceived ‘genuine care’ is the mechanism connecting AI involvement to lower trust ratings.

Top african marketing voices confirmed for amc

Top African marketing voices confirmed for AMC 2026

Explore the 2026 AMC Conference speaker line-up. Top African marketing voices gather in Zambia to tackle AI, AfCFTA, and brand power. Register today.

Person holding two smartphones with app icons visible on their screens a large tv screen in the background shows colorful app icons

Broadcast Research Council confirms launch of total video measurement

New industry currency will bring South African television and online video audiences together in a single measurement system.

Dj performing on a brightly lit stage as colorful lights shine over a dancing crowd

Sense of belonging and atmosphere are key to attracting event-goers

Making people feel that an event space reflects their values leads to long-term loyalty and spending. FOMO also plays its part.

Smiling woman with curly hair in a yellow and white striped shirt holds a red can and points to the text 'what makes some ai ads creepy '

Researchers examine why some AI ads fail while others succeed

Norms may change, but right now it’s better to err on the side of caution when using AI in advertisements, study finds.

Woman in a denim jacket looks at her phone while standing with a shopping cart in a grocery store aisle holding a boxed item

Study examines drivers of FMCG purchases in three African markets

GeoPoll insights report from Kenya, Nigeria and South Africa finds that quality remains the key purchase driver in FMCG.

E-commerce retailer aims to speak to the hearts of South Africans

As the country celebrates Heritage Month, Takealot embarks on a campaign to speak to consumers in all 12 official languages.