Faculty of Commerce, Law and Management (ETDs)

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    The role of development finance institutions (DFIs) in bringing economic stability during times of crisis: a case study of 2021 July unrest in South Africa
    (University of the Witwatersrand, Johannesburg, 2024) Mafitoe, Mapotso Justine; Horvey, Sylvester
    Investment by DFIs play a positive and significant role in fostering economic growth in developing countries. However, social unrest threatens business operations; it leads to trade deficits, significant job losses and currency depreciation. Yet, no empirical research focuses on the consequences of social unrest on the operations of South African DFIs generally. This study fills this gap by exploring the impact of the July 2021 social unrest on the DFI’s ability to bring economic stability during times of crisis. A sample of 12 participants were interviewed and the data was analysed using thematic analysis. The results show that the activation and incorporation of a ‘financial intermediary’ role into the DFI’s corporate strategy precipitated organisational change and enabled the DFI to ‘rescue’ businesses post-2021 civil unrest. However, PUBRF was more than a solution to the problem of affected businesses. It was an activity that enabled the DFI to bring economic stability and job-rich industrialisation, achieve organisational growth and profitability, and develop a plan to effectively handle future critical events. The successful integration of PUBRF into the DFI’s operations confirms previous studies that organisational change capability is illustrated by an organisation’s ability to learn, anticipate future changes, and manage episodic change without compromising core organisational activities. This study recommends that organisations embrace change as it leads to enhanced relations with the environment, upskilling, coordination, flexibility, and resilience, all of which ultimately promote performance.
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    What funding model will foster SMME development in South Africa?
    (University of the Witswatersrand, Johannesburg, 2023) Pezisa, Sinesipo Qama
    Literature suggests that the Small, Medium and Micro Enterprise (SMME) sector is important to local economic development. SMMEs can alleviate the problem of unemployment while being efficient and flexible by serving segmented consumer markets. First, this study investigates whether SMMEs have been the key drivers of economic development in South Africa. Second, the role of Development Finance Institutions (DFIs) in the financing of SMMEs and their funding models. Finally, the research presents a case study of a small private financial institution, the Small Enterprise Foundation (SEF), a Micro Finance Institution (MFI) in South Africa and its significant contribution to the SMME sector and economic development. The study found that the SMME sector remains largely under-serviced by the traditional financial institutions and DFIs, due to the reluctance to grant loans as a result of the lack of knowledge on the borrowing behaviour of SMMES. The case study of the SEF also showed significant funding gaps experienced by microenterprises that receive funding from it. The study concludes by making recommendations that the role of DFIs needs to be enhanced by using a key governmental department such as the Department of Small Business Development (DSBD) to be a key coordinator of SMME programmes among DFIs such as the Industrial Development Corporation (IDC).