The influence of customer-supplier relationships through the facilitation of credit on the development of micro enterprises in the Sobonakhona Makhanya tribal area of KwaZulu-Natal

Abstract

The purpose of this study is to identify the influence of customer-supplier relationships through facilitation of credit on the development of Micro enterprises in the Sobonakhona Makhanya Tribal Area of KZN. This study originates from the fact that there are many SMME‟s in South Africa, absorbing about 15 million people (DTI, 1995:7). Even though this sector is providing most of the employment in the country, they still find it difficult to arrange funds to start or expand their businesses. Lending institutions do not want to provide finance for them, and if they do, they do it with reluctance and reservations. As a result, SMME‟s are not able to grow and develop into big businesses. This is a quantitative and exploratory research study which was used to explore, for the first time in Sobonakhona Makhanya Tribal area, the relationship between customer-supplier relationships and accessibility of credit facilities. The study made use of questionnaires to obtain the respondents‟ perceptions on the research questions developed. A questionnaire that consisted of 35 questions was distributed to 50 SMME owners in Adams Mission, Madundube and Umbumbulu (AMU) villages. Cronbach‟s reliability analysis was not applied as it was not appropriate for use with this questionnaire. The research showed that a relationship between customers and suppliers assists SMME‟s to obtain access to credit facilities. Added to this, SMME owners, who had access to credit facilities, experienced positive changes in their businesses. This serves to prove that access to credit is essential for the development of SMME‟s. As a result, recommendations to train and educate SMME owners on how to manage their businesses, how to apply for credit and the requirements needed for applications have been set out.