Matric results release underscores unemployment challenge as SMEs struggle for funding

With the 2025 matric results being released, a fresh wave of young South Africans stands on the brink of an unforgiving labour market.

With the country’s official unemployment rate recently reported at a staggering 32.9%, one of the highest in the world, the situation appears dire even before these new school leavers enter the workforce.

Youth unemployment particularly plagues the nation, with nearly half of individuals aged 15 to 34 currently unable to secure employment or active labour-market opportunities.

In this challenging context, the significance of small and medium-sized enterprises (SMEs) as a critical driver for job creation gains even more prominence. SMEs make up a crucial pillar of South Africa’s economy, accounting for 60% of employment and contributing approximately 34% of the national GDP.

However, these enterprises frequently grapple with substantial funding constraints, hampering their capacity to expand operations or hire at scale.

“Matric results are an important milestone, but for many young South Africans, the hard part is just beginning,” Nicole Swart, Managing Director at Merchant Capital said.

“Our labour market does not have enough formal jobs waiting for them. If we are serious about expanding opportunity, we must ensure that viable small businesses can access the funding they need quickly to support their business and grow, in a way that aligns with real trading conditions.”

Despite the pivotal contributions made by SMEs to employment, access to suitable finance remains a persistent issue.

The hurdles many small businesses face include seasonal cash flow fluctuations, stringent collateral requirements, and lengthy approval processes.

Such challenges often result in delays or setbacks in securing the necessary capital when it would be most impactful.

A recent survey has underscored the urgency to tackle financial exclusion and to encourage broader participation among micro-, small-, and medium-sized enterprises in the economy.

“This is not just about credit. It is about practical, timely support that allows businesses to invest in stock, equipment, premises, and staff to take advantage of opportunities and have the operations to deliver,” Swart added.

“Slow or rigid funding processes effectively force some businesses to delay or forego growth opportunities.”

Merchant Capital is stepping up to address this financial gap with tailored growth funding designed around the realities of small business cash flow.

Their model entails rapid decision-making and repayment structures that align with daily or seasonal revenue patterns, easing the financial pressure during slower months while unlocking potential for growth when the conditions are right.

This approach is particularly timely as South Africa seeks to stimulate job creation beyond public sector employment.

Small businesses often exhibit greater flexibility in adapting to hiring demands compared to larger corporations, especially across sectors such as retail, services, hospitality, and local manufacturing.

However, the sustainability of this potential hinges on access to timely and appropriate finance that can keep pace with expanding opportunities.

“When small businesses have confidence in their funding position, they make bolder decisions about hiring and investment. Faster access to growth funding strengthens balance sheets and the employment pipeline that our economy urgently needs,” Swart said.

The release of the matric results also highlights entrepreneurship as a promising avenue for young South Africans, particularly those who may struggle to find immediate formal employment.

By extending various funding options, such as Merchant Capital’s asset-free growth funding, established SMEs can be equipped to expand and innovate, ultimately creating first-job opportunities, apprenticeships, and access points for skills development within actual operating businesses.

“South Africa’s SMEs are already embedded in communities and play a significant role in sustaining local livelihoods. By giving these businesses the tools to act on demand, we help expand real economic opportunity for young people and support broader job creation across the country,” Swart further said.

BUSINESS REPORT