In response to the news that Government is getting ready to move ahead with the revamped Transformation Fund offering big BEE points incentive, SME empowerment organisation, Unconventional CA (UCA) has raised concerns that the proposal reflects no meaningful shift from earlier drafts and is unlikely to serve the real needs and requirements of South Africa’s entrepreneurs and SMMEs.
Hiten Keshave, CEO of UCA and an Enterprise & Supplier Development (ESD) specialist, says the latest version of the fund does little to address the fundamental questions around impact, accountability, and practical SME development.
“There are no material changes to what was first drafted,” says Keshave. “At its core, this remains a proposal to centralise capital, without any clear direction on how those funds will actually translate into sustainable SME growth or meaningful support for entrepreneurs on the ground.”
Keshave warns that the proposed governance structure, which places decision-making power in the hands of a minister-appointed board, raises serious concerns for SMMEs, particularly in an environment where public trust in state institutions is already fragile.
“Given the lack of confidence many South Africans already have in how state-owned entities and the broader economy are managed, concentrating this level of funding under a self-appointed board is a major red flag,” he says. “For entrepreneurs and small businesses, this raises real concerns about transparency, accountability and whether funding decisions will reflect their realities.”
He also questions whether the Transformation Fund is being positioned as a genuine solution to SME development, or as a mechanism to plug existing funding shortfalls within government itself.
“The Minister of Small Business Development, Stella Ndabeni-Abrahams, has acknowledged that African startups receive less than 3% of global venture capital and that her department faces budget constraints when it comes to supporting SMMEs,” says Keshave. “Entrepreneurs are entitled to ask whether this fund is truly designed to empower them — or to subsidise gaps in government’s own funding capacity.”
According to Keshave, the proposal further fails to recognise the diversity of the SME sector, treating small businesses as a single category despite vast differences in scale, sector, and maturity.
“You cannot generically bucket all businesses into one class,” he says. “SMMEs require targeted capital, mentorship, operational support and access to markets, not a once-off pooled solution designed primarily to simplify compliance.”
Keshave adds that meaningful economic transformation and SME-led growth will require far more than what he describes as a policy “quick fix.”
“If we are serious about supporting entrepreneurs and building a resilient SME economy, this will take more than a single fund,” he says. “It requires all political parties to put ego and politics aside and collectively rethink what effective, practical transformation should look like.”
Unconventional CA believes the proposal should prompt a broader national conversation focused on accountable, decentralised, and development-driven approaches that genuinely serve South Africa’s SMMEs.
