This is according to Swiss based Zurich Insurance’s latest survey of 3,800 senior executives of SMEs around the world who listed the top three risks faced by their businesses.
South African SMEs identified high competition/ dumping prices impacting sales margins, lack of consumer demand and overstocking as their biggest challenges.
This was followed by reputational damage, corruption and legal and fiscal problems. Cyber-crime and natural disasters were however low on the list of perceived risks.
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Zurich said that SMEs from around the world shared the same sentiments as SA SMEs but ranked theft third overall.
“There is no doubt SMEs have been hit hard by the financial crisis. Despite this, entrepreneurs globally and locally have demonstrated resilience and tenacity; aiming to thrive in what is still a competitive and challenging environment, said William Surmon, national head of sales and distribution at Zurich SA.
(READ MORE: S.Africa's SME space turns a new leaf)
“Governments across the African continent, including South African leaders, have recognised that SMEs are a strong driving force for socio-economic development and have prioritised the expansion of small businesses within their respective markets. Insurance plays an important role in facilitating this growth; helping SMEs fulfil their ambitions by giving them the tools to manage the risks they face and thereby, the tools to pursue growth opportunities.”