Government finance institute provision: impact of enterprise development on SMMEs growth and local economic development in Gauteng
Date
2018
Authors
Molo, Sibo
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Abstract
Public Enterprise Development has been applied by government to stimulate the growth of SMMEs, which are identified as a key to job creation and local economic development. This report examines the impact of public enterprise development through provision of funding by Gauteng Enterprise Development (GEP) to SMMEs in Gauteng. The research examines data on SMMEs that received Enterprise Development funding between the period of 1st April 2006 and 31st of March 2016 from GEP in the Gauteng province. The data was analysed from June 2016 with the focus on the growth in turnover and employment figures prior to and after the SMMEs participated in the GEP support program. This paper uses a quantitative research approach and positive paradigm is assumed. Also, a quasi-experimental research study is used similar to a prior study by Leeuw (2010), with a t-test to measure the growth. This implies that funding, as an aspect of public enterprise development, has a positive influence on the sales and employment growth of SMMEs which in turn has implied positive effect on local economic development (LED) in Gauteng. The results from this study showed that the number of employees increased by an average of 13 employees per company after the GEP intervention from the original average of 8 employees before the awarding of the loan. However, the data analysis of the t-test summary statistics provide sufficient evidence that Hypothesis 1: A positive direct correlation exists between finance provision and growth in employment of SMMEs, is not supported. The difference in the number of employees is not statistically significant since the p-value of the t-test (p-value = 0.095) is greater than 0.05. Thus, the null hypothesis is not rejected and it is concluded that there is no correlation between provision of finance and growth in employment of SMMEs. Hypothesis 2: A positive direct correlation exists between finance provision and growth in turnover of SMMEs, the cross tabulation showed that there was an increase in the turnover earned. It is thus, concluded that there is a positive direct correlation between the provision of finance and the growth in turnover of SMMEs.
Description
A research report submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, in partial fulfillment of the requirements for the degree of Master of Management specialising in Entrepreneurship and New Venture Creation
Johannesburg, 2018
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Citation
Molo, Sibo (2018) Government finance institute provision : impact of enterprise development on SMMEs growth and local economic development in Gauteng, University of the Witwatersrand, Johannesburg, <http://hdl.handle.net/10539/26063>