An absence of visionary leadership is a major stumbling block for entrepreneurs in South Africa, Nedbank chairman Reuel Khoza said on Tuesday.

"Leadership at all levels should demonstrate a commitment to creative freedom," he told delegates to a microfinance conference in Sandton.

Small, medium and micro enterprises (SMMES) should form the backbone of South Africa's economy.

"Big business and the state cannot provide enough jobs," he said.

Entrepreneurs in the informal sector experienced police harassment. Within 18 months of existence, many SMMES "fall off a cliff into an abyss".

"Some struggle on as subsistence businesses. They do not grow beyond that."

A lack of finance was not necessarily the key obstacle. Finance was in fact more available in South Africa than in many other countries. The bigger problem was the lack of an enabling environment.

According to the World Bank, South Africa was one of the most difficult countries in which to do business.

In Singapore, the state required three simple procedures, which took three days, and cost 0.01 percent of per capita income, to start a business.

In South Africa, five complicated procedures were needed. These took 19 days and cost 0.3 percent of income, said Khoza.

Several leaders, including President Jacob Zuma, had spoken of the need to develop townships into thriving centres of business.

"This will remain a dream until it becomes easier to do business," Khoza warned.