Soweto, the bustling, urban area in Southwest Johannesburg, has revised its business regulations to help small businesses. Now the city government just needs to work on creative ways to improve financing for small businesses, according to a report in Mail & Guardian.

“From the city’s perspective, we have taken the position (that) we are going to support small businesses in different ways,” said Ruby Mathang, a member of the City of Johannesburg’s Mayoral Committee for Economic Development in an article on Mail & Guardian.

Many of the new forms of support are in the form of fewer regulations and greater access to finance, the report said.

One example is co-production, as the mayor of Johannesburg refers to it. When a large contract is awarded, now 30 percent of the contract will be given to a small business. And under the new, relaxed regulations, that small business might be operating out of someone’s home – a practice that was frowned upon in the past.

Although small businesses opened often in Soweto, they are too often just as quick to close, unable to compete with the large businesses that came to the area en masse. Large businesses often can undercut small businesses in price.

To be competitive, small businesses need to expand their space, remodel and hire more staff, the report said. Financing, however, has always been a sticking point. Banks often aren’t willing to lend money to small, home-based or family-based businesses.

First National Bank reports that applications for business loans increased by 409 percent from September 2012 to September 2013. Banks are not approving loans at the rate, however.

Lack of security for credit, limited financial records, low business management capability and a lack of marketing expertise are common reasons for declining loans to Soweto’s small businesses, said Donovan Steenkamp, head of customer financial solutions for business banking at Standard Bank.