On 19 May 2026, I attended the 2026/2027 Budget Vote of the Department of Small Business Development (DSBD), delivered by Minister Stella Tembisa Ndabeni at Parliament in Cape Town. FinHub was invited in recognition of the work we do at the intersection of financial technology, SMME development, and open financial infrastructure. This is a reflection on what the budget signals — and what it asks of institutions like ours.
A budget with clear priorities
The DSBD tabled a budget of R3.036 billion for the 2026/2027 financial year, with R2.154 billion allocated to transfers and subsidies. The bulk of that — R1.899 billion — flows to the Small Enterprise Development and Finance Agency (SEDFA). Across seven priorities, the speech was structured around a single premise: that small enterprises are the primary engine of job creation and economic transformation in South Africa, and that the policy infrastructure must match that reality.
The Minister was direct. She cited the National Development Plan’s finding that small enterprises are projected to account for close to 90% of new jobs and upward of 60% of new economic value. She also acknowledged the constraints entrepreneurs face daily: access to finance, administrative burden, inadequate business infrastructure, and competition from large retailers encroaching on township markets.
What stood out to me was the framing: this is no longer a welfare conversation. It is an economic participation conversation. That distinction matters for how we design support systems.
The VAT threshold shift matters more than it looks
“We commend the Minister of Finance for increasing the compulsory VAT registration threshold from R1 million to R2.3 million. This is a major victory for small businesses across the country.” — Minister Ndabeni, Budget Vote Speech, 19 May 2026
For micro and small enterprises, VAT compliance has never been just an administrative cost — it is often the line between staying informal and formalising. Raising that threshold meaningfully reduces the friction of operating as a legitimate business. It is the kind of structural change that compounds quietly.
The department also announced a one-stop digital shop platform for business licensing, continuation of the Business Licensing Bill process, and a new OneSEDFA platform that integrates funding, business development support, and credit guarantees into a single digital ecosystem. These are exactly the kinds of friction-reduction interventions that allow financial technology to deliver real value. Digital platforms only work when the underlying regulatory environment supports them.
Access to finance: the hard problem remains
SEDFA’s disbursements in the past financial year reflect a clear set of priorities:
- R2.3 billion to Black-owned enterprises
- R1.2 billion to rural enterprises
- R1.2 billion to women-led businesses
- R501 million to youth-owned businesses
- R383 million to township economy revitalisation
The targeting is deliberate. The gap that persists is the middle layer — the infrastructure that connects capital to capability, at scale, without requiring a branch network or a traditional credit score. That gap is where fintech sits. And it is the gap FinHub’s work is explicitly designed to address.
The department also confirmed a new R300 million TIA-SEDFA Innovation Fund to commercialise scalable ideas, a R300 million Youth Entrepreneurship Fund to be launched during Youth Month, and the expansion of the Township and Rural Entrepreneurship Programme (TREP), with its funding cap raised from R1 million to R3 million.
Where FinHub fits in this picture
FinHub’s work with SEDFA, our open banking AIS sandbox built on Absa’s API, and our GenesisBloc Launchpad are not peripheral to this policy agenda — they sit directly inside it. The question the budget raises, and that we try to answer practically, is: what does the infrastructure layer look like when it actually serves the enterprises SEDFA is trying to fund?
Two of our GenesisBloc startups illustrate this concretely.
Tata-iMali (GenesisBloc Cohort 1.0) is a fintech company built by UCT MPhil in FinTech graduates. It provides low-cost blockchain-enabled point-of-sale and wallet solutions for township merchants, powered by the ZARP stablecoin for near-zero-fee payments. Tata-iMali has raised $200,000 to date, including $150,000 from the former Ripple CTO Stefan Thomas, and was named Most Exceptional Startup at the SA Innovation Summit.
BrownFS / Tesha (GenesisBloc Cohort 2.0) is building a fuel card and micro-credit platform for gig-economy drivers — people who earn on platforms like Uber, Bolt, Checkers Sixty60, and Takealot, but have no payslip and no conventional credit profile. Tesha’s thesis is straightforward: real-time platform income is a more accurate signal than a credit score, and the infrastructure to act on it should already exist. Over 110 drivers have been onboarded, with R1 million-plus in fuel spend processed and R225,000 in loans disbursed at a default rate below 5%. The platform generates driver behavioural data that feeds into alternative credit scoring.
These are not student projects. They are ventures that emerged from academic research, went through a structured pre-incubation process at FinHub, and are now operating in the real economy, solving the exact access and inclusion problems the DSBD budget is designed to address.
Taking this work to the Eastern Cape
One of the more consistent observations in the Minister’s speech was the persistence of geographic inequality in access to enterprise support. The Northern Cape Agricultural Incubator she highlighted as a milestone for an underserved province is a signal: the department is trying to move support infrastructure into areas that commercial providers have not reached.
FinHub is doing something similar in the Eastern Cape. Funded by the FirstRand Foundation (R8.5 million over three years), we established the UCT–Cortex Hub Fintech Lab in East London, in partnership with the Cortex Hub — a non-profit technology incubator based there. The Lab’s inaugural Summer School ran in January 2026. A Winter School is scheduled for mid-2026.
The programme is designed to reach students from the University of Fort Hare and Walter Sisulu University, and local entrepreneurs who would not otherwise have access to fintech education, open banking APIs, or a structured pre-incubation pathway. Over three years, the initiative targets capacity building for 302 students and pre-incubation support for 32 new startups across three cohorts.
The goal by FY 2027–28 is a self-sustaining fintech lab in East London — one that does not require UCT to be physically present to function. That is what regional innovation infrastructure looks like in practice.
The ecosystem coordination question
The final priority the Minister outlined was ecosystem coordination. She was blunt: a fragmented ecosystem produces fragmented outcomes. The department is developing a National MSME One-Plan and will host a Presidential MSME Investment Conference in November, at which ecosystem partners — multilaterals, government, banks, private corporates, SETAs, and universities — will be asked to make concrete commitments.
FinHub is an active part of that ecosystem. We have convened policy dialogues with the SARB, PASA, and SEDFA. Our MPhil programme has produced 60 graduates since 2018. We have raised over R73 million in external funding and built the only open banking AIS sandbox in South Africa running on a live bank API. These are not claims about what we plan to do. They are what we have done.
The budget was a useful articulation of the problem. The Presidential Conference in November will be the more important test — of whether the ecosystem can commit to coordinated action, and whether institutions like FinHub are prepared to show up with concrete proposals and measurable outcomes attached.
We are.