Affordable Finance for Africa's SME Growth
Africa's small and medium-sized enterprises (SMEs) face significant obstacles to growth due to high capital costs.
The Global SME Finance Forum 2025, held in Johannesburg, highlighted the need for more affordable, accessible, and relevant financing for African SMEs.
- High capital costs are partly due to global risk models overestimating African market risk.
- Limited data availability contributes to this issue.
Encouraging rating agencies and investors to engage directly with African businesses could lead to improved risk assessments, reduced premiums, and lower borrowing costs.
Beyond Interest Rates
African SMEs also face hidden barriers, including:
- Regulatory delays
- Currency volatility
- Fragmented trade systems
These factors raise the real cost of doing business and hinder entrepreneurial potential.
Africa’s entrepreneurial potential will remain underrealised without more affordable, accessible, and relevant financing.
Author's summary: Affordable finance is crucial for Africa's SME growth.