A study of the factors impacting on the effectiveness of SMMEs in the Mafikeng area

Abstract

The main objective of the study is to investigate the factors impacting on the effectiveness of SMMEs based in the Mafikeng area, of the North West Province in the Republic of South Africa. The Small Medium Micro Enterprises (SMMEs) are recognised as the key mechanism for general development globally. Furthermore the SMMEs are often perceived as the backbone of an economy and play an important role in the development process of most countries. Increasingly SMMEs have been recognized as an important vehicle for creating employment, reducing poverty, enabling industrialisation process, reducing income inequality and providing desirable sustainability in the economy as a whole. In order to achieve the main objective outlined above, the researcher formulated the following main research question. What are the factors that impact on the effectiveness of SMMEs based in the geographic area of Mafikeng? For purposes of gathering data both the qualitative and quantitative research methods were used to investigate factors that impact on the effectiveness of SMMEs in the Mafikeng area. The results of this study has shown the following factors as responsible for the ineffectiveness of SMMEs based in the Mafikeng area; lack of training, lack of financial support, cash flow problems, late payments by clients and poor marketing. The study concludes by recommending that more funding and training need to be channelled towards SMMEs that have potential to succeed. Furthermore it is recommended that the government must develop more focussed strategies to specifically deal with challenges confronting SMMEs in general.