Sarupen Urges Stronger Global Partnerships to Boost MSME Growth and Inclusion

Deputy Minister of Finance Ashor Sarupen has called for closer collaboration between governments, the private sector, development finance institutions, and multilateral partners to unlock the full potential of Micro, Small and Medium Enterprises (MSMEs). Speaking at the Global SME Finance Forum in Johannesburg, held as an official side event under South Africa’s Group of Twenty (G20) Presidency, Sarupen underscored the vital role of MSMEs in driving job creation, innovation, and economic growth.

MSMEs as the Backbone of Economies

Globally, MSMEs account for more than 90% of all businesses, and in South Africa, they represent 91% of formal enterprises, provide 60% of jobs, and contribute up to 34% of GDP. Sarupen emphasised that their economic contribution is undeniable, but warned that structural barriers, funding gaps, and regulatory complexities continue to constrain their growth.

“Their impact is clear, and so is our responsibility to create an environment that enables their success,” he said. Sarupen also highlighted the potential of the informal sector, which contributes 6% of GDP and 17% of employment, but struggles with productivity and access to support.

Unlocking Finance Through Innovation

Sarupen stressed that the private sector must play a central role in supporting MSMEs, not just through traditional capital but also through innovation and market access. He pointed to the growing role of non-bank finance actors, including equity investors, crowdfunding platforms, and venture capital, as promising avenues that must be scaled to close the persistent MSME funding gap.

“In line with the G20/OECD Principles on SME Financing, we must support diverse instruments, enhance transparency, improve financial literacy, and promote timely payments,” he said.

He cited Sweden’s Nasdaq First North as a global example of how tailored stock exchange platforms can help small businesses raise capital. Locally, leveraging platforms like the Johannesburg Stock Exchange (JSE) could open new growth pathways for SMEs.

South Africa’s Domestic Reforms

Domestically, South Africa has made strides through the Financial Inclusion Policy, adopted by the National Treasury in 2023. The policy sets out a framework for deepening inclusion, expanding access to MSMEs, and diversifying financial channels.

Since its adoption, the policy has improved coordination among stakeholders and spotlighted the need for legislative reforms and alternative financing instruments. Initiatives such as the Khula Credit Guarantee Scheme, the Industrial Development Corporation (IDC), and the National Empowerment Fund (NEF) remain central to ensuring financing reaches entrepreneurs who cannot secure commercial credit.

Sarupen emphasised that finance is only part of the equation. MSMEs also face barriers in market access, skills acquisition, technology adoption, and regulatory compliance. To address these, government is advancing reforms under Operation Vulindlela Phase 2, a joint initiative between the Presidency and National Treasury aimed at accelerating structural reforms to stimulate growth and job creation.

Financial Inclusion on the G20 Agenda

South Africa assumed the G20 Presidency on 1 December 2024, running through November 2025, under the theme “Solidarity, Equality, Sustainability.” Financial inclusion is a central pillar of its presidency.

The National Treasury has prioritised moving from mere access to financial services toward meaningful usage, ensuring that tools such as payments, savings, credit, insurance, and remittances are used effectively to build resilience.

South Africa’s G20 Presidency Priority Paper, titled “Moving from Access to Usage”, sets out strategies to enhance financial service utilisation, particularly for underserved groups — women, youth, informal workers, and MSMEs. The paper highlights the importance of financial literacy, consumer protection, and designing products that meet the needs of communities.

Building Global Collaboration

Sarupen said South Africa is also championing the G20 Global Partnership for Financial Inclusion Action Plan for MSME Financing, which fosters cooperation among both G20 and non-G20 members. This collaboration allows countries to share insights, innovations, and challenges in advancing SME finance.

“Unlocking MSME potential requires a holistic approach—combining capital, skills development, digitalisation, and supportive policies. Together, we can build ecosystems that are inclusive, sustainable, and future-ready,” Sarupen concluded.

By anchoring financial inclusion in both domestic reforms and global cooperation, South Africa aims to transform MSMEs into resilient drivers of growth and inclusive prosperity.