Factors influencing the growth of SMEs in Durban

Abstract

The research study investigated the factors that affect the growth of Small and Medium Enterprises in the Durban Metropolitan Area. The global economic environment has been facing a plethora of challenges in recent times and nations are struggling to find ways of stimulating their economies. SMEs have been known to be great contributors to the development of economies through the provision of employment and increasing the Gross Domestic Product. However, inasmuch as SMEs are drivers of economic growth in various countries, there are diverse factors that influence the growth of SMEs, leading to stunted growth and sometimes closure of these businesses. The study focused on investigating the factors influencing the growth of SMEs in Durban. A mixed methods approach was adopted for conducting the study. Structured questionnaires were administered to 60 SME owners in Durban and there was a 100% response rate. In addition, 12 interviews with other owners of SMEs were conducted to gather in-depth information on the factors influencing the growth of SMEs. The convenience non-probability sampling technique was employed in coming up with the sample from the target population, which comprised both registered and unregistered SMEs. The researcher personally administered and collected the questionnaires from the business owners. Semi-structured interviews were also conducted by the researcher with SME owners. Quantitative data was then analysed using the Statistical Package for the Social Sciences (SPSS) version 24.0, whilst qualitative data was analysed using Nvivo 11. The study found that entrepreneurial skills, the availability of support and training for SME owners, managerial skills and the availability of capital are important factors that influence the growth of SMEs. In addition, the study found that government policies that favour the formation of SMEs are crucial for the growth of these businesses.