Examining the challenges in accessing funding for SMMEs
This study examines the challenges that small, medium and micro-enterprises (SMMEs) face in accessing funding and the challenges that these SMMEs have to overcome without adequate support or funding and to learn from the experiences that they have been through. Information was gathered using interviews. The study was motivated by increasing unemployment and the need to understand why SMMEs are not creating more employment and why they are unable to develop their companies, considering that the government has established a number of funding agencies. The fact that most developed countries have achieved their status in terms of gross domestic product (GDP) because of the role that SMMEs have played also motivated the researcher to establish what these countries have done differently and the lessons that the can learnt from these countries. The outcome of the study showed that South Africa is not doing well in terms developing and creating avenues that are available for SMMEs to access funding from government funding institutions. The study found that banks funded 52.89% of the entrepreneur respondents in the form of a loan, followed by loans received from business partners at 11.11%. Funding from government funding agencies was zero percent. While it is accepted that a limitation of this study is that it is small scale and does not cover a wide sampling area, and the findings therefore cannot be generalised, the concern is that none of the sample size expressed any positive feedback when asked about the government funding agencies. This is a call to review the policies that look at supporting SMMEs. Perhaps the policies are not addressing the immediate challenges faced by SMMEs, or the mandate for these institutions is not in line with the immediate needs of SMMEs. This study also supports previous findings that SMMEs struggle to access funding from banks if they do not have any form of collateral.