Interest rate hikes, the last thing SMEs wanted to hear

interest hike

If truth be told, current economic conditions do favour the growth of small businesses. And the end of the cycle of lower interest will only aggravate matters.

Lee Bromfield, CEO of Core Lending at FNB Business, foresees, with the rising interest rates cycle, small and medium-sized businesses facing a tough task to stay in business. “Following the end of a cycle in which the South African Reserve Bank (SARB) kept interest rates at their lowest levels in decades, the current trend will be a challenge for various sectors of the South Africa economy,” he said. “The rise in interest rates will definitely have an impact on small and medium-sized businesses in the short-term, because it is affecting the entire eco-system that the sector needs in order to flourish.”

it is unfortunate that business owners tend to wait until their business is in trouble before they contact their bank for a solution in a typical South African only-at-the-last-minute mentality, Bromfield bemoaned.

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