Developing Business Linkages between Large Firms and Local SMEs in South Africa: A Policy Analysis

South Africa faces challenges in fostering effective business linkages between large firms and local Small and Medium Enterprises (SMEs), which can hinder economic growth. A review of existing literature and consultations with industry experts were conducted to inform recommendations. There is a significant proportion (70%) of SMEs in South Africa that lack access to formal credit channels, which hinders their ability to engage with larger firms effectively. Government intervention through targeted financing schemes can significantly enhance business linkages and stimulate economic development. Implementing subsidized microfinance programmes is recommended to bridge the gap between SMEs and large businesses.