The Small Enterprise Development and Finance Agency (SEDFA), the state body that now houses the former Small Enterprise Finance Agency (SEFA), the Small Enterprise Development Agency (SEDA) and the Cooperative Banks Development Agency, has published its annual report for the year to 31 March 2026, which it describes as its first full year of operation after the merger. For a business owner thinking about applying, the report is useful for two reasons: it shows how much money actually went out the door, and it shows how the Agency’s own loans are performing, which shapes how carefully it will assess you.
How much SEDFA lent
According to the report, SEDFA’s Development Fund disbursed R1.345 billion in the year and its Commercial Fund disbursed R432 million. The Agency says more than R1.78 billion was disbursed to micro, small and medium enterprises (MSMEs) and that its group loan book grew from about R3.64 billion to R4.07 billion. It spent R2.47 billion of an approved R2.97 billion budget, which it describes as 83% utilisation.
One number needs care. The Minister of Small Business Development’s foreword congratulates SEDFA for investing “more than R2.8 billion” in the small business sector. The loan disbursements in the Agency’s own review add up to about R1.78 billion, and the pages we read do not reconcile the two figures, so we do not treat R2.8 billion as money lent to businesses. The report also says delays in obtaining approvals under Section 66 of the Public Finance Management Act held up the rollout of certain credit guarantees and funding products.
The Agency’s finances and audit
The Auditor-General gave SEDFA an unqualified opinion on its financial statements, and the report records that the Agency remains a going concern. Total assets were about R8.93 billion, cash and cash equivalents R5.87 billion and net assets R3.51 billion. The net surplus was R404 million, down from R535 million a year earlier, which the report attributes to a higher impairment provision on the loan portfolio.
The Auditor-General was less comfortable on performance reporting. SEDFA reports overall organisational performance of 77%, and the report says the Auditor-General found weaknesses in how certain achievements were verified, particularly the job creation and job sustenance figures. Management has accepted the findings. In practice that means the job numbers in the report should be read with caution, and applicants should expect to be asked for evidence rather than estimates.
Where the loan losses are
This is the part that matters most for applicants. The report says expected credit losses on the total outstanding loan balance, which includes funds SEDFA manages off its balance sheet, rose from R3.22 billion to R3.82 billion, lifting the overall coverage ratio from 70.28% to 74.29%. It also says the Auditor-General noted growth in expected credit loss provisions and non-performing loans, and that Stage 3 exposures, the credit-impaired category, rose from about R3.14 billion to R3.98 billion. The report attributes the deterioration mainly to account migration and a write-off policy under which the Agency has little appetite to clear bad accounts.
On the loans written since the merger in October 2024, the picture is mixed:
- First default rate: 12.4% against a target of 14.5% and a risk-appetite limit of 15%.
- Development Fund impairment: 21.71%, better than its 30% target.
- Commercial Fund impairment: 32.25%, well above its 10% target. The report says this signals deterioration in asset quality, higher default risk or interventions that are not working, and that management is still assessing whether the cause is portfolio seasoning, the economy, underwriting or collections.
The report also cautions that the new loan book is young, so the early results need to be confirmed over time.
What this means if you plan to apply
SEDFA says it is strengthening pre-investment services, due diligence, credit risk models, collections and post-investment monitoring. We cannot tell from the report how that will change approval times or decisions, but the direction is clear and a few practical points follow from what the report describes:
- Your cash flow will be tested. The report says SEDFA’s credit risk unit assesses management capability, market risk, projected cash flows and repayment capacity, and that cash-flow assumptions are scrutinised and stress-tested. Bring a realistic forecast and the records behind it.
- Expect security to be discussed. The collateral SEDFA lists includes notarial bonds over plant and equipment, instalment-sale security over financed assets, cession of debtors, mortgage bonds and personal suretyships, depending on the deal.
- New funds are not all open. The report says SEDFA introduced the Construction Fund and the Imbali for Her Women’s Programme during the year, and held consultations on Military Veterans, Youth and Creative Sector funds. A fund that is being consulted on is not the same as one taking applications, so confirm status with SEDFA before you spend time on a proposal.
- The digital platform is still being built. The report says implementing the OneSEDFA integrated digital platform remains a strategic priority, so check how to apply for the specific product you want.
Our earlier explainers set out what each product offers and who qualifies: SEFA funding explained, the TREP relaunch and its R3m loans and every government funding programme for small businesses in one place. Always confirm current criteria, forms and any closing dates on SEDFA’s own website before applying.
This article is based on SEDFA’s annual report for the year ended 31 March 2026 as published on the Parliamentary Monitoring Group’s document server. Figures are the Agency’s own, and we have not independently audited them.
