{
  "id": 12123666,
  "title": "Profitable but not investable – the bankability challenge facing MSMEs",
  "url": "https://urgent.news/2026/10/05/profitable-but-not-investable-the-bankability-challenge-facing-msmes",
  "topic": "business",
  "section": "Business",
  "published": "2026-10-05T09:39:00.000Z",
  "source": {
    "name": "ITWeb",
    "slug": "itweb",
    "url": "https://www.itweb.co.za/article/profitable-but-not-investable-the-bankability-challenge-facing-msmes/KzQenvjyj1BqZd2r"
  },
  "original_language": "en",
  "account": "The Bankability Gap Report, released by Fetola, reveals that many established South African small businesses are profitable but face challenges in demonstrating their financial readiness to lenders, investors and commercial partners. The research, which assessed businesses across all provinces and sectors from April to July 2025, found that while 86.6% of these businesses had sustainable sales and 76.8% were profitable, only 34.7% had credible management reports and just 13.3% could produce a 12-month budget. This discrepancy between running a profitable business and being able to present credible financial information is described by Fetola as the MSME bankability gap. Grant Prince, head of impact investing at Fetola, emphasizes that fintech can play a crucial role in addressing this gap by providing trustworthy data that investors can rely on. The focus of fintech is on enhancing fundamentals such as financial records, cashflow management, budgeting, and management information to enable businesses to access and manage growth capital more effectively. Catherine Wijnberg, CEO of Fetola, notes that the ecosystem has traditionally viewed MSME growth as primarily a funding issue, but capital alone is rarely the primary constraint. She stresses that businesses that successfully grow do so by developing the necessary systems, disciplines, and resilience beforehand. The research also highlights that half of the assessed businesses faced cashflow pressure despite being profitable. A key factor in financial stability appeared to be the presence of a 12-month budget, with 90.9% of businesses with such a budget being assessed as financially stable over the next six months, compared to 65.3% of those without one. Investors consider various aspects of a business's financial records, including the trustworthiness of the information, cash generation capacity, reliance on key customers, and availability of funds for daily operations and unforeseen challenges. Fetola's insights suggest that improving access to finance requires addressing both the capital gap and the bankability gap. Improving financial readiness through strengthened financial records, management accounts, budgeting, cashflow forecasting, and internal controls becomes crucial for enabling investors, lenders, and commercial partners to assess businesses with confidence.",
  "summary": "Fetola research shows many small businesses are generating profit but lack the technology and financial systems needed to attract and retain investment.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}