​This paper explores whether frictions in the credit market are constraining the efficient allocation of capital in South Africa. The analysis focuses on firm level data for manufacturers. The results indicate that access to finance in South Africa is, for most manufacturing firms, not a major constraint on their business. In fact, South Africa has a lower proportion of firms reporting access to finance constraints than most of its emerging market peers. However, small firms and those receiving payments largely in cash are more likely to report a financing constraint. The extent to which a firm faces financing obstacles does not correlate with variations in the firm level marginal product of capital (MPK), which suggests that credit access is not an important limitation on allocative efficiency in the manufacturing sector. Indeed, smaller firms are found to have a lower MPK, which would explain their relatively higher probability of facing a financing constraint. Furthermore, this paper provides tentative evidence that structural obstacles such as crime and regulatory challenges are constraining the productive allocation of firm capital. The use of a unique firm level dataset was important for understanding the dynamics described above. However, this data was collected in 2007, so the results should be considered tentative as some variables may have changed in the interim