By Lerato Mutlanyane

Despite their resilience and creativity, black entrepreneurs face significant challenges in accessing funding and resources from the banking sector.

Entrepreneurs say the banking sector’s failure to support black-owned businesses remains a pressing challenge.

According to the CEO of Free State Black Business Chamber (BBC), Mosebetsi Dladla,

This lack of support not only hampers the growth of black entrepreneurs but also limits the economy’s potential for inclusivity.

"Banks do not support black businesses because they still use a system that excludes black owned companies.

“They require collateral and for instance, the Deeds Registry Act is not entirely applicable to blacks.

Credit: https://lawlibrary.org.za/akn/za/act/gn/2025/5948/eng@2025-03-05

“Black people do not have land or property to pose as collateral, Dladla said.

Journal News spoke to economist and financial Analyst from the University of Free State, Dr Werner Otto regarding this.

When asked whether banks are hesitant to fund black entrepreneurs, he said banks are in general cautious lenders when considering the current macro–economic climate, ongoing political instability, and economic histories from the past such as the 2007 banking crisis also known as the ‘credit crunch’, which triggered the global financial crisis of 2008.

On BEE funding he says research does observe in favour of the importance of sufficient B-BBEE funding because not doing so may materialise as a reputational liability for banks, including a closed business opportunity.

“Apart from the previous points of relevance raised, business funding contracts must be financially and commercially sound, showing sound relevance of risk escalation”, said Otto.

Otto also said the B-BBEE Commission Report of 2022/2023 highlights the pressure on banks to support transformation, and agrees that banks’ failure to fund black entrepreneurs is a systematic impediment to entrepreneurial progress in South Africa.

Journal News reached out to all big four traditional banks, but did not receive response.