The Forum: Southern African Accounting Association, May 2019 (original) (raw)
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Small, medium and micro enterprises (SMMEs) are not spared from the global economic and financial turmoil which periodically occurs worldwide and therefore they must adjust their financial needs to accommodate such dynamic phenomena. This is particularly relevant in developing countries such as South Africa. It is important to note that SMMEs are major contributors to the economy, as the y provide employment opportunities and create economic wealth resulting in the reduction in poverty and increased employment. In order to succeed and prosper, SMMEs need to establish a sound financial management function, and therefore it is vital to investigate the financial challenges these firms are experiencing. Th is paper reveals a better and deeper understanding of the issues surrounding the financial difficulties encountered by SMMEs in the Gauteng Metropolitan area. The data used in the study was gathered by administering structured questionnaires to businesses within Gauteng, selected rand...
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South Africa is characterized by the persistence of structural and cyclical unemployment which manifests in 24, 7% of the country's working-age enduring long term joblessness. This socioeconomic plight has engendered the promotion of Small, Micro and Medium Enterprises (SMMEs) as instrumental vehicles for employment creation despite formidable challenges they face. As much as the SMME sector absorbs the majority of total labour force, their failure to resist internal and external shocks restricts growth and graduation into the formal sector. SMMEs are renowned for short lifespans, poverty wages and precarious employment opportunities suggesting they fail to lift the boards. It is against this backdrop that this paper concludes that, it is imperative to, firstly, increase financial and non-financial support, sector-specific research and the design of customized interventions as well as reducing regulatory constraints on SMMEs in order for the small businesses to survive, grow and create sustainable employment for the discouraged South African labour force. The purpose of this paper is to expose the South African employment challenge, trace SMME progress (or lack thereof) in employment creation, identify constraints faced by small entities and present recommendations as, perhaps a way forward for the exacerbation of small entity productivity, improvement of earnings of the working poor and getting the poor working.
It has been widely acknowledged that Small, Medium and Micro enterprises (SMMEs) possess certain attributes akin to entrepreneurship that make them indispensable tools for economic growth and development. Economies with advanced growth have SMMEs as a causative crucial factor. These small businesses however, face a variety of challenges especially at their start-up and growth phases. Two main challenges were focused on – difficulty in obtaining finance and government support services which can both be solved by the government. This study aimed at bridging the gap between effective implementation of government services and SMME failure. It focused on how an effective implementation of government services and funding can promote SMME growth and development. It also looked at how a conducive regulatory environment will enable SMMEs to thrive. Connection was also made to government bureaucracy and corruption in relation to the legal and regulatory environment and how it hinders SMMEs growth and development. Data was collected with the use of questionnaires which were distributed to 100 SMMEs in Thohoyandou, South Africa. The Statistical Package for Social Sciences was used to analyse the data gathered. Concerning, the effectiveness of these government institutions toward the improvement of the SMMEs sector. It was discovered that although government has put in place several schemes and initiatives, these small businesses still fail. This was attributed to the fact that these small businesses were hardly aware of the institutions put in place to aid them in matters of financing and training as a higher percentage of them still requested government funding and assistance. Conclusions and recommendations were also made on actions that will ensure that these government support services are effectively rendered toward SMME growth and development as well as how reforms in the law and regulation will work towards less failure and better performing SMMEs. Keywords: SMMEs; Government support services; bureaucracy; Entrepreneurship; Growth and development; Thohoyandou; South Africa.