The challenges of enriching small, medium and micro enterprises with financial management knowledge in KwaZulu-Natal metropolitan area

Abstract

South Africa is experiencing enormous socio-economic challenges such as gender-based violence, poverty and inequality, including ever-increasing high levels of unemployment. Many businesses are either closing or downsizing. People are resorting to alternative ways to alleviate poverty by establishing SMMEs. To get established, SMMEs are encountering a daunting task when it comes to implementing sound financial systems. The study sought to examine the challenges of capacitating SMMEs with financial management acumen and to remedy the difficulties of implementation thereof. Primary research was conducted amongst SMMEs in KwaZulu-Natal, Metropolitan Area. The population of this study consisted of a sample of 250 randomly selected SMMEs participated from a target population of 2200. Data were analysed using descriptive and inferential statistical techniques such as SPSS and Cronbach’s Alpha. The study found, that the sector has grown and has become an engine to drive economic stabilisation, poverty alleviation and employment creation. However, perennial challenges grew exponentially. Moreover the covid-19 pandamic has worsen the situation. Government has played a huge role in making sure the SMMEs sector get the necessary financial support, through different entiies like the SEFA, SEDA, and SSSP. The majority of SMMEs concurs that lack of adequate financial management acumen negatively affects their success. Most of them cannot upskill themselves and are not satisfied with stakeholder interventions regarding training and development. The study also found that, funding is not a panacea to all the challenges faced by this sector. Solutions should come from SMMEs instead of stakeholders prescribing how problems should be resolved. Apart from financial management understanding, SMMEs maintains that networking opportunities with business associates are vital to their success.