The success rate of government programmes to support SMMEs

Abstract

Government is responsible for formulating policies and legislation to address the needs of the small business sector in order to promote small business sector development. In execution of the above mentioned mandate, the DTI has among other things developed a policy known as the National Industrial Participation Program (NIPP) to utilise the government procurement leaver to develop small businesses. The primary objective of this study is to determine the success rate of NIPP to support SMME. The NIPP was closely analyzed as a case study. The study attempts to determine whether processes and systems at an implementation phase of the NIPP are effective and efficient it ensuring that the program the maximum benefit to SMMEs. Various program developed and implemented by government to develop SMMEs are briefly presented in this study with emphasis placed heavily on the NIPP. The NIPP is explicitly directed at achieving small business development through facilitation of export of value-added goods, skills and technology transfer, research and development collaboration, and direct foreign investment. Statistical figures demonstrating the performance of the NIPP are presented and an empirical study conducted to in line with the objective. The results of the study indicate that the business plans submitted to the DTI are approved as NIPP projects but remain in the DTI data base of approved projects with out getting any form of assistance from the NIPP obligors. A conclusion is reached from the study that small business owners submit their business plans to NIPP to be assisted with finance in the following categories: Business expansion; and Bridging finance. The respondents to the study also listed the following reasons put forward by obligors for not assisting them although their business plans are approved as NIPP project.