The effects of government funding agencies’ support on the success of SMMEs within the King Cetshwayo District: a study of uMhlathuze Municipality

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Date
2023
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University of Zululand
Abstract
This study investigated the effects of government funding agencies’ support on the success of small, micro, and medium enterprises (SMMEs) within the uMhlathuze Municipality in the King Cetshwayo District of KwaZulu-Natal, South Africa. Despite the critical role SMMEs play in economic growth and job creation, South Africa faces a high business failure rate, exacerbated by inadequate support from numerous government funding agencies. This study employed a mixed-methods approach to comprehensively assess the impact of government funding agencies’ support on the success of SMMEs in the uMhlathuze Municipality. The research combines quantitative and qualitative methods to gather a holistic understanding of the influences at play. The quantitative component was a structured survey administered to a representative sample of SMMEs in the region. The survey collected data on various metrics of success. Additionally, key local economic development indicators, such as employment creation and poverty alleviation, were measured. The data were analysed using the descriptive statistical analysis and independent tests on IBM SPSS version 30 to analyse and present data and to identify correlations and trends between government support and SMME success. The qualitative component comprised in-depth interviews and focus group discussions conducted with SMME owners, government officials, and representatives from funding agencies. The qualitative data provide insights into the experiences and perceptions of stakeholders regarding the effectiveness of government support programmes. Thematic analysis was employed to distil key themes and patterns from the qualitative data, allowing for a deeper exploration of the challenges and opportunities faced by SMMEs. ATLAS.ti version 23 software was used to conduct the analysis. The findings highlight a complex relationship between government support and SMME success, revealing significant barriers that hinder effective assistance, including limited market linkages and inadequate access to resources. The study emphasises the necessity for custom capacity-building initiatives and innovative financing mechanisms to enhance SMME growth. By providing empirical insights into the effectiveness of government support programmes, this research aimed to inform policy decisions and improve the entrepreneurial ecosystem in uMhlathuze, ultimately contributing to sustainable economic development in the region.
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