A Support Framework for SMME Success in the Eastern Cape Province, South Africa

Abstract

Policy makers and researchers are in agreement to the fact that entrepreneurship is crucial for the development of any economy, and therefore it is seen as the economic engine of many countries. Majority of entrepreneurs operate as small, micro and medium enterprises (SMMEs) and they contribute significantly to employment creation, gross domestic product (GDP), poverty reduction and equitable distribution of income in both developed and developing countries. The main purpose of this study was to develop a support framework for the success of SMMEs in the Eastern Cape province of South Africa. The secondary objectives of this study were to determine the effect of financial and non-financial support on the success of the business as well as determining the perceptions of SMMEs on the relevancy of SMME support from both the private and public sectors. Furthermore, the study determined if monitoring and evaluation of SMMEs performance is done after training as well as ascertaining if successful SMMEs plough back to the SMME sector. A post-positivistic paradigm was adopted and a mixed method research design was followed in conducting this research . A census of three hundred and fifty SMMEs registered in the Eastern Cape Development Agency formed part of the research population. The Statistical Package for Social Sciences (SPSS) was used to analyses data. Descriptive statistics, t-test, Chi-Square tests, Pearson Correlation, simple linear regression and multiple regression were used to analyse data. It was found that there is a significant relationship between financial support given by the public sector and SMME success used in the model however, there is no significant relationship between non-financial support given by the private and public sector and SMME success used in the model, there is concurrence in business interventions delivered by private and public sector institutions and SMMEs needs used in the model, a gap exists between SMME expectations and support provided by both the public and private sectors, monitoring and evaluation of business success after intervention and support by the private and public sector is not done and the majority of SMMEs (95%) highlighted that do not plough back to the public and private sector. These results are useful for the development of the SMME sector, which is important to South Africa. Some recommendations, including the new SMME support framework were provided to entrepreneurs, aspiring entrepreneurs, public and private sectors.