Abstract:
Unemployment in South Africa has prompted the government to shift focus in terms
of employment creation resulting in encouraging citizens to become entrepreneurs.
This took effect after 1994 and small, medium, and micro enterprises (SMMEs) have
since been the important drivers of the economy. They have provided jobs to many
unemployed people and reduced poverty in many communities. Despite their
importance, these enterprises encounter challenges that threaten their sustainability
and growth. The purpose of the study was to investigate the internal and external
factors affecting SMMEs. To get a clear understanding of the challenges confronting
managers of SMMEs in Lepelle Nkumpi Municipality (LNM), a comprehensive
investigation of this problem was conducted through a literature review. The study
adopted a mixed method approach, where the researcher used both qualitative and
quantitative methods to elicit information from the participants. The study also
adopted the interpretivism and positivism paradigms. Data were collected through
the usage of structured questionnaires and semi-structured interviews from the
respondents who were selected purposively. Analysis of quantitative data was done
through SPSS and presented in tables, graphs, and pie charts. For qualitative data,
thematic analysis was used. The findings confirmed what was reviewed in the
literature, namely, that managers of SMMEs encounter operational difficulties; and
inaccessibility of funding is a major challenge. The study revealed that 78% of the
respondents used personal savings and some borrowed from friends and family,
whilst only 22% received funding as a form of government grants and bank loans.
To confront the challenges of funding, government and parastatals should ensure
that SMMEs receive funding in an impartial manner; and government should also
serve as collateral for SMMEs with financial institutions in cases where government
could not offer funding since lack of collateral proved to be a blockade for SMMEs.
Chapter 5 of this research report provides a conclusion and recommendations
arising from the data collection on the improvement and accelerated support to
ensure the sustainability and growth of SMMEs.
