Enhancing financial inclusion for small and medium-sized enterprises in South Africa through digital finance

Abstract

This research delves into the transformative role of digital finance in augmenting financial inclusion for small and medium-sized enterprises (SMEs) in South Africa. The primary aim is to scrutinise how digital finance contributes to enhancing financial inclusion for SMEs in the South African context. Employing a positivist paradigm, this study adopts a quantitative methodology. The data collection process entails purposeful sampling of 321 SME owners from a total pool of 700, with the sample size determined using the Cochran formula. The study's results underscore the potential of digital finance to boost financial inclusion for SMEs by facilitating access to financial services, curbing transaction costs, and streamlining financial transactions. Nevertheless, persistent challenges, including limited digital infrastructure, inadequate financial literacy levels, and regulatory impediments, necessitate attention to facilitate the widespread adoption of digital finance among SMEs. In conclusion, the study recommends fostering collaboration among key stakeholders such as financial institutions, technology companies, and government agencies. This collaborative approach aims to establish a conducive ecosystem that supports the adoption of digital finance among SMEs, ultimately advancing financial inclusion in South Africa.