South Africa’s SMMEs – small, medium, and micro enterprises – are often called the backbone of our economy. But in reality, they’re much more than that. They are job creators, community anchors, innovators, and hustlers. They carry the weight of more than 80% of the country’s employment and contribute significantly to GDP. And yet, when it comes to how they are segmented and served – especially by banks and policymakers – they remain largely misunderstood. 

The problem is simple: the way we classify SMMEs no longer reflects the world they operate in 

Most banks and institutions still use turnover as a blunt instrument to define and serve this diverse group of businesses. It’s a legacy approach rooted in administrative convenience rather than business reality. As a result, segmentation models often exist to differentiate commercial value for the bank – not to truly understand or unlock the potential of the entrepreneur. 

Layered on top of this are headcount classifications from the National Small Business Act: 

• Micro: Fewer than 10 employees 

• Small: 11 to 50 

• Medium: 51 to 200 (or 250 in some sectors) 

The dual view below highlights the mismatch between how SMMEs are defined and how they operate. 

So, what happens when a business has three employees and an R11 million turnover due to digital reach? Or when a “medium” business, by headcount, lacks access to market networks? The rigid thresholds break down. The result: misaligned banking products, misjudged risk, and missed opportunities. 

SMMEs are not a homogenous segment. They are a system. A living, shifting ecosystem. 

The 2024 FinScope MSME Survey confirms what many in the industry already suspect – micro enterprises dominate in number. But it also reveals how nuanced the sector truly is, especially when viewed through behavioural and contextual lenses. To design for this ecosystem, we must move past headcount and revenue-based proxies. 

This isn’t just about banking differently. It’s about building differently. 

Our entrepreneurs don’t need charity. They need clarity. Clearer paths to value, clearer signals of support, and clearer products that meet them where they are. A spaza shop in Umlazi doesn’t need the same tools as a growing logistics firm in George – and it’s time we stopped pretending they do. 

If we’re serious about inclusive growth, we must invest in the intelligence that surrounds the SMME economy. Not just in data models, but in the humility to ask better questions. In the tools that direct change as it happens. And in delivery models that embed capability where it matters most. 

Because these business owners are not a line on a balance sheet. They are the future of our economy. It's time for banks to transition to being more insight-led to create real impact for your SMME segment and gain greater market share.