South Africa’s manufacturing sector contributes close to 11% of the country’s GDP[1] and was one of only three industries to add jobs in the first quarter of 2026[2], yet output has contracted for two consecutive quarters[3]. The small to medium enterprises (SMEs) working to modernise out of the current slump struggle to access the manufacturing finance they need to put smart technology on the factory floor – and for many, that gap is widening, not closing.
Manufacturing finance provider Lula product manager Koreshini Pillay addressed the funding reality of Industry 4.0 at Manufacturing Indaba in July.
“Manufacturing SMEs start conversations about smart manufacturing by focusing on the technology,” she said. “Every system upgrade, sensor and traceability platform carries an upfront cost, with returns months down the line. The question facing the market is what it costs to modernise, and who funds this transition. Most are pointed to [the] IDC [Industrial Development Corporation] for expansion or SEFA [ Small Enterprise Finance Agency] for guarantees, but neither solves it: costs land now, revenue only arrives months later. Manufacturers need manufacturing finance that gets the right technology into production at the right time, underwritten against real transaction data, so working capital can be structured around the production floor.”
