"Access to finance for small business is an enabler for creating and sustaining enterprise and jobs," Mr Manyi said. "The current fragmented approach of delivery of finance to small business has resulted in higher overhead costs, limited reach and insufficient impact.

"This merger will fall under the auspices of the IDC, where it will be better resourced and capacitated. It will also create a framework for improved support to small, medium-sized and micro enterprises," Mr Manyi said.

The Cabinet also approved the Electricity Regulation Second Amendment Bill, which will help align the various laws relating to the industry, provide for better regulation of licence holders and ensure speedy implementation of electricity infrastructure projects.

The bill is also expected to bolster the procurement of power from independent producers.

Also approved was the Lesotho Highlands Water Project phase-two agreement between South Africa and Lesotho, which will be submitted to Parliament for ratification.

"The agreement seeks to augment the original treaty and address specific issues related to the operation and implementation of phase two," Mr Manyi said.

Phase two comprises a system to augment the delivery of water in South Africa along with a hydropower generation project, he said.