Exploring Challenges & Support Structures for Small, Medium & Micro Enterprises in South Africa

Abstract

The purpose of this study is to explore what are the current impediments that still face SMME’s in South Africa and whether support programs in place have been effective in mitigating these impediments that result in the observable high failure rate of this sector. The study explores the SMME sector as well as all responsible and participating stakeholders within government, NPO’s and conglomerates that aid in the progress of the sector, as a crucial vehicle in job creation in South Africa. The research uses lack of funding as a focal point and aims to critically analyze any measures and efforts made thus far to eliminate this continuous barrier, primarily in South Africa. The research method used is a qualitative approach which was deemed as an effective approach to identify impediments faced by SMME’s through semi-structured questions conducted through an interview, while also investigating efforts and strategies employed by interviewing key stakeholder within support programme initiatives in the country. The study revealed the following findings: Access to finance remains an impediment for micro and small business in South Africa; Micro and small enterprises utilize mainly non-traditional funding alternatives due to the difficulties of accessing traditional funding avenues; Informal sector transition in South Africa continues to be stalled; Lastly there have been evident changes regarding supplier diversity efforts in South Africa’s private sector owed to governments support program and incubation effort