As the global business community prepares to mark World Entrepreneurs’ Day on 21 August, fintech pioneer ProfitShare Partners is calling for a fundamental shift in how small and medium-sized enterprises (SMEs) are financed—warning that traditional funding models are failing to turn business opportunities into tangible employment.
The call comes against a stark economic backdrop. Statistics South Africa’s latest Quarterly Labour Force Survey (Q1 2026) revealed that the country’s official unemployment rate has climbed to 32.7%. While governments and development finance institutions routinely point to SMEs as the primary engines of job creation, ProfitShare Partners Founder and CEO, Andrew Maren, argues that a critical disconnect is stalling economic recovery.
“We often speak about SMEs as engines of employment, but jobs are not created by potential alone,” says Maren. “An SME may win a purchase order, secure a contract, or be appointed to deliver a major project. On paper, this looks like progress. Yet, between winning the work and being paid for it lies a difficult, high-risk stretch of execution that stops many entrepreneurs in their tracks.”
The Hidden Threat: The SME “Execution Gap”
In the lead-up to World Entrepreneurs’ Day—a moment dedicated to celebrating innovation and business leadership—Maren points out that thousands of viable small businesses are failing not from a lack of talent or opportunity, but from a lack of capital at the precise point of delivery.
Before a small business receives its first payment from a contract, it must typically purchase materials upfront, pay wages, rent machinery, arrange transport, and satisfy strict compliance criteria. When traditional banking institutions reject these businesses due to a lack of long-term trading histories or balance sheet assets, the broader economy suffers.
“When a small business cannot fund delivery, the impact extends far beyond the single business,” Maren explains. “It means extra staff are not hired, local subcontractors are not engaged, and orders with local suppliers are delayed. A contract is merely a start. Delivery is where the jobs actually begin.”
Bridging the Gap Through Transactional Fintech
To mark World Entrepreneurs’ Day, ProfitShare Partners is advocating for a national and global movement toward transactional funding models that assess the creditworthiness of the specific business opportunity rather than relying solely on traditional credit scoring.
By evaluating confirmed purchase orders from credible corporate or government buyers, alternative finance models allow SMEs to access capital quickly without burdening their balance sheets with long-term, crippling debt.
“Growth for a small business rarely happens in a smooth, linear line—it often arrives suddenly with a breakthrough contract,” says Maren. “If the funding system cannot respond at that exact moment, we fail to convert that contract into real-world jobs, supplier payments, and skills development.”
Maren emphasises that while finance alone will not solve unemployment, removing the structural barriers that prevent SMEs from executing confirmed work is one of the most effective levers for economic growth across emerging markets.
“As we celebrate entrepreneurs this August, we must move beyond praising their resilience and start providing the structural support they need to deliver. If we want SMEs to drive economic transformation, we must bring capital to the exact point of execution.”
