Small medium micro enterprise business goals and government support: A South African case study

Abstract

Small and medium-scale enterprises (SMMEs) form the majority of the enterprises in the South African economy. The South African government has identified the SMME sector as one of the potential enablers to achieve its objectives of improving job creation opportunities, reducing poverty and creating a more equitable distribution of wealth. The aim of this article was to provide a perspective on the success government support initiatives has had on the SMME sector. To achieve this, the study sought to analyse the perceived strengths and weaknesses of government’s national strategy and its institutions tasked with creating an enabling environment for the sector. The study employed a survey research design methodology in which mixed methods were used. The national business strategy employed by government was critically analysed. Empirical data was collected from 282 respondents in order to answer the research question. The results show that the government’s approach has favoured ‘supply-side interventions’ including, providing access to training, credit, mentoring and information to existing and new business. Furthermore, this study has identified the lack of awareness as the primary reason for the under-delivery of the government support initiatives in SMME development. Respondents indicated that they frequently made use of the services of business consultants and external specialists from which they perceived added more value to their respective businesses.