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Majority of South Africans experience high levels of poverty and unemployment. In most cases, the unemployed resort to self-employment where they engage in small and informal business activities to generate a sustainable livelihood. The underlying problem is that it is costly to serve micro enterprises in South Africa due to high security costs, collateral constraints and the regulatory bottlenecks that hinder lending. The objective of this article is to propose strategic microfinance models that can be used to improve the provision of micro credit to micro enterprises in South Africa. The research is literature-based since it draws on a wide range of academic literature that documents government strategies of financing micro enterprises in South Africa. Relevant information was also accumulated through an analysis of official documentation and/or annual reports obtained from the Department of Trade and Industry (DTI). International