Jonathan Holden, Chief Operating Officer at SOLmate

As South Africa celebrates Freedom Day, a date that commemorates the nation’s first democratic elections, the conversation around economic freedom and opportunity is more relevant than ever. With one of the highest unemployment rates in the world, digital financial tools like digital wallets are emerging as powerful enablers of inclusive economic participation, entrepreneurship, and small business growth.

With unemployment hovering above 32%, the call for job creation through entrepreneurship has never been louder. “We can no longer rely solely on government to create jobs,” says Jonathan Holden, Chief Operating Officer at SOLmate, a leading digital wallet provider. “South Africa needs a thriving entrepreneurial culture, and that starts with giving people the tools to manage their money, transact easily, and grow their businesses independently — and that’s exactly what digital wallets enable.”

Driving Growth from the Ground Up

Over the past 31 years, South Africa’s small business ecosystem has experienced significant evolution — despite persistent challenges tied to historical inequality and economic instability.

• As of 2024, South Africa’s small and medium-sized enterprises (SMEs) continue to play a pivotal role in the nation’s economy. According to the Department of Small Business Development, SMEs contribute approximately 40% to the country’s Gross Domestic Product (GDP). However, it’s noteworthy that only 37% of these SMEs are formally registered, indicating a significant portion of the sector operates informally.
• The FinScope MSME Survey South Africa 2024 found that there are approximately 3 million micro, small and medium-sized enterprises (MSMEs) in South Africa, employing around 13.4 million people. More than 2.5 million microenterprises make up the sector, with 72% operating informally.
• Formal small businesses grew from 590,000 in 2010 to over 710,000 by 2022, even amid the pandemic.
• SMEs are significant employers in South Africa, accounting for approximately 60% of employment.
• New business registrations peaked at 434 024 in 2022 according to data from the World Bank, reflecting a shift towards self-employment as traditional job markets shrank.

But entrepreneurial intent is declining. According to the Global Entrepreneurship Monitor, only 10% of South African adults intended to start a business in 2023 — the lowest in two decades. Established business ownership also halved, from 3.5% in 2019 to 1.8% in 2023

“Financial barriers — like access to funding, banking, and transaction infrastructure — are a huge reason why so many businesses never get off the ground,” explains Holden. “Digital wallets are breaking down these barriers by providing low-cost, accessible alternatives to traditional finance. They give entrepreneurs control over their money, which is critical in the early stages of building a business.”

The Role of Digital Wallets in Financial Empowerment

Digital wallet platforms like SOLmate are playing a critical role in driving financial empowerment across South Africa. By allowing users to transact instantly without incurring high bank fees, these platforms offer an accessible alternative to traditional banking. They also enable users to receive payments seamlessly, even from informal markets — a game-changer for small business owners and entrepreneurs. Importantly, consistent use of a digital wallet helps individuals build a financial history, which can be instrumental in accessing credit or funding in the future.

With easy-to-use mobile tools for budgeting and cash flow management, digital wallets are empowering more South Africans to take control of their finances and grow their businesses with confidence.

Small formal businesses already contribute 30% of employment and about a third of South Africa’s total economic value. By empowering more entrepreneurs — especially youth and women — with easy access to digital finance, platforms like SOLmate can accelerate inclusive economic growth.

“Entrepreneurship is not just about innovation — it’s about survival and self-determination,” says Holden. “If we want to reduce unemployment and build a resilient economy, we must invest in digital financial tools that support people in turning ideas into income.”

ENDS