A sociological evaluation of access and participation of the SMME sector in the North West Province tourism industry

Abstract

Small, Micro and Medium Enterprises (SMMEs) are often perceived as the backbone of an economy. There is widespread consensus on their significant contribution to economic growth, employment creation, poverty alleviation and local and regional development. In South Africa, a lack of access to funding, especially to the Previously Disadvantaged Individuals (PDIs), often hinders small businesses from developing their full potential. Funding limitation of SMMEs is mainly due to the high risk attributed to small businesses and their lack of collateral. The fact that SMMEs often receive inadequate financial support or the total lack of it puts them at a competitive disadvantage and tend to harm their long-term growth and development, a waste of entrepreneurial resources and edge, a reduction of productivity and a lower economic growth rate. Restricted access to funding is one of the main problems faced by tourism-related SMMEs in the North West Province, and can ultimately have an adverse effect on economic growth and overall welfare of the people. This research study presents a sociological evaluation of SMME access and participation in the North West Province, South Africa, tourism industry. The study appeals to an outcome-based evaluation approach of measuring and assessing the degrees and levels to which tourism SMMEs, since the all-inclusive 1994 democratic elections in South Africa, have benefitted . or otherwise from the provincial tourism industry. The study reveals that, ten years after the fall of apartheid, black entrepreneurs' access and participation in the provincial tourism industry, is still limited due to stringent qualification criteria that serve as barriers to accessing financial and developmental support needed to enhance and fast-track meaningful participation in the tourism industry, particularly in the North West Province. The virtual failure to help small business entrepreneurs creates a great controversy about their very existence and effectiveness of such financial institutions with the task of helping up-and-coming black entrepreneurs. This thesis stresses the need for comprehensive evaluation of such institutions so that their existence would have a meaning, more importantly to the PDIS within the tourism industry. The criticisms levelled against these financial support institutions are extensively explored in this study. In conclusion, the study recommends that, in order to make use of the full potential of small business entrepreneurs in the provincial tourism industry, thereby participating meaningfully in the industry, there is the need to provide them with an enabling environment, which encompasses the access to capital and relaxation of the set qualification criteria for financial support.