By Suzi Georgiou-Grobler is Product Head – Liability at iTOO Special Risks
Small, Medium and Micro Enterprises (SMMEs) are more than just a buzzword in South Africa’s economic discourse – they are the lifeblood of our economy.
Representing approximately 90–91% of all businesses, they contribute significantly to GDP and are responsible for between 60% and 70% of employment opportunities. For millions of South Africans, SMMEs represent more than just goods and services; they are a crucial pathway out of poverty and into sustainable livelihoods.
South Africa’s soaring unemployment rate, currently hovering near 32%, underscores the urgent need for job creation. Unlike larger corporations, these smaller enterprises are agile, embedded in local communities and better positioned to absorb workers with diverse skill sets, including those without formal qualifications. Each SMME launched or sustained is another step toward tackling unemployment and closing inequality gaps
Starting and sustaining a small business is incredibly challenging. These companies often operate on razor-thin margins, lack access to significant reserves and face systemic hurdles like energy supply issues, crime, fluctuating market conditions and inflation. Additionally, unforeseen events such as natural disasters, fire, product liability issues, cybercrime or a pandemic, can quickly bring a thriving enterprise to its knees. That’s where insurance becomes not just advisable but imperative.
For SMMEs, insurance is not merely a financial product; it is the safety net that can mean the difference between resilience and ruin. With adequate coverage, entrepreneurs can recover lost assets, rebuild operations and retain employees – even in the aftermath of unforeseen crises.
Beyond providing compensation, insurance also instils confidence and peace of mind, empowering SMME owners to take measured risks and innovate without fear of catastrophic loss.
Furthermore, well-insured SMMEs are better positioned to attract investors and partners who view their risk management strategies as indicators of long-term sustainability. Access to such funding often fuels growth, creating more jobs and fostering a virtuous cycle of economic empowerment.
Policymakers, insurers and financial institutions must collaborate to create tailored insurance products that suit the unique needs and budgets of SMMEs. Simultaneously, efforts to educate entrepreneurs on the importance of risk management and insurance must be executed with urgency.
Due to limited resources, SMMEs often do not have the luxury of dedicated departments or compliance teams. They are often one-person powerhouses, doing everything from bookkeeping to sales. Insurance must therefore be simple, flexible and relevant to their day-to-day reality.
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There’s a significant and largely untapped opportunity in this space for brokers and financial advisers who are willing to truly understand the needs of SMMEs. Many entrepreneurs remain uninsured or underinsured, not due to a lack of need, but due to a lack of awareness and accessible advice.
This is where brokers become catalysts for change. By educating clients, offering modular and affordable coverage options, and using digital tools for onboarding and engagement, advisers can play a critical role in building a more resilient and inclusive business ecosystem.
Those who embrace a mindset that prioritises long-term impact, as well as immediate returns, will find themselves at the forefront of a more human and sustainable model of financial services.
SMMEs are more than just businesses. They represent dreams, jobs, community stability and the future of our economy. Insurance, when done right, can be the silver bullet that protects these businesses and enables them to thrive.
Beyond mere protection, insurance plays a transformational role as an enabler of business continuity and resilience. Ideally, the right insurance solutions serve both economic and societal progress by supporting the backbone of our nation’s economy.
The right insurance products do more than cover risks; they also help small businesses grow confidently, improve credibility with partners and funders and weather the storms that might otherwise force them to close shop.
If South Africa truly seeks inclusive growth and economic transformation, we must protect the very businesses that hold the greatest potential to uplift communities. The resilience of our economy lies in ensuring that SMMEs not only survive but thrive – even when the unexpected occurs. In this race to create a better future, insurance is no longer a luxury for SMMEs – it is a lifeline.