A LACK of funding remains the biggest challenge faced by small businesses and the country needs to find solutions to face this problem, said Neren Rau, chief executive of the South African Chamber of Commerce and Industry (Sacci).

Rau spoke to Sowetan previewing Sacci's conference, gala dinner and exhibition, which will be held at the Sandton Convention Centre on October 3 and 4 .

Sacci has 17000 businesses as members, 50 affiliated chambers and 15 national associations representing various sectors of the economy.

Rau said this year had been difficult and business needed to engage in dialogue.

He said due to the current economic climate the country's economy would again shed jobs.

Hence new strategies were needed to address issues of poverty, unemployment and sustainable growth.

One sector expected to provide stimulus to the economy, is the small business sector.

Rau said he did not agree with business commentators saying small businesses do not need finance but marketing and information.

"In a textbook it sounds correct, but the reality is that small businesses need finance," he said. "Small businesses need loans with no interest, especially in the beginning phase.

"We have to work together to find solutions. We can't wait and think the economy will fix itself.

"That is why we are asking all government departments, business organisations and businesses to participate in this conference."