Exploring the challenges faced by SMMEs in the Buffalo City Metropolitan Municipality in the Eastern Cape province

Abstract

SMMEs drive economic growth, particularly within the Eastern Cape Province of South Africa. Unfortunately, SMME development within the Buffalo City Metropolitan Municipality (BCMM) is hindered by high unemployment rates and ongoing poverty. In light of these challenges, this study explores ways to support SMME development in BCMM by evaluating existing mechanisms for assistance followed by recommendations for fostering sustainable growth. This research aims to identify factors contributing to a heightened failure rate among local SME firms operating within BCMM's jurisdiction. To do this, a compilation of secondary data from diverse sources, such as studies on Buffalo City's difficulties and national policies and initiatives advocating for SMME growth, was made. The review process incorporated academic- and non-academic publications and other pertinent valid references. An analysis mechanism involving coding and thematic identification techniques was utilised to examine the research methodology results. The study further explains the research paradigm models and methodologies for finding and culling relevant information. Qualitative content analysis was used to scrutinise data collected from SMME owner-managers in BCMM through virtual MS-Teams meetings and face-to-face interviews for analytical interpretation. Supplementary insights have been derived via extensive literature reviews and interview analyses to ensure a holistic view of SMME owners' challenges. The study involved interviewing ten participants to investigate challenges encountered by SMMEs in the Eastern Cape Province. To this end, a rigorous analytical methodology incorporating open coding and thematic analysis was adopted to elicit crucial keywords corresponding to significant themes relevant to financing and financial management issues. The results demonstrate that SMMEs require infrastructural support beyond mere entrepreneurial ideas at the inception stage. The study culminates in presenting pragmatic remedies from thoroughly exploring literature and research outcomes, underscoring the importance of business networking and training initiatives and embracing novel paradigms for productive functioning. The research contributes to professional knowledge by offering recommendations for future studies, evaluating trends in addressing SMME challenges, and reflecting on the study's execution process.