Factors Affecting Small and Medium Enterprises’ Financial Sustainability in South Africa
The dwindling growth of small businesses and their rate of failure in South Africa has been traced to poor financing. Thus, the factors affecting the financial sustainability of small and medium-sized enterprises in South Africa are examined in this study. Using purposive sampling, data were collect...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Research and Postgraduate Support Directorate
2021-07-01
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| Series: | African Journal of Inter-Multidisciplinary Studies |
| Subjects: | |
| Online Access: | https://journals.dut.ac.za/index.php/ajims/article/view/893 |
| _version_ | 1818388917914697728 |
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| author | Odunayo Olarewaju Thabiso Msomi |
| author_facet | Odunayo Olarewaju Thabiso Msomi |
| author_sort | Odunayo Olarewaju |
| collection | DOAJ |
| description | The dwindling growth of small businesses and their rate of failure in South Africa has been traced to poor financing. Thus, the factors affecting the financial sustainability of small and medium-sized enterprises in South Africa are examined in this study. Using purposive sampling, data were collected from 310 respondents, however six were incorrectly completed. The analysis was based on data collected from 304 respondents which cut across owners and/or managers from small and medium construction, manufacturing, retail, and agricultural enterprises. A quantitative research design that falls under the positivist paradigm was used. Specifically, through a descriptive and multivariate regression analysis, it was found that financial awareness, budgeting, accounting skills, and access to finance have positive and significant effects on the financial sustainability of SMEs with all the variables, having 0.005 probability values, respectively. Out of all the variables examined, budgeting and access to finance have the largest absolute values of 0.425 and 0.373, respectively. Thus, it was concluded that workshops, training, and seminars to improve the financial literacy of small and medium enterprises should be organised. This will improve owner’s ability to deploy the accounting and budgeting skills and they will be exposed to meeting loan criteria and conditions from financial institutions. Also, adequate funds should be allocated to cater for the regular training and development of small business owners using the services of financial experts. |
| first_indexed | 2024-12-14T04:33:28Z |
| format | Article |
| id | doaj.art-61da09bb20c74eb485fe13f75e5d04eb |
| institution | Directory Open Access Journal |
| issn | 2663-4597 2663-4589 |
| language | English |
| last_indexed | 2024-12-14T04:33:28Z |
| publishDate | 2021-07-01 |
| publisher | Research and Postgraduate Support Directorate |
| record_format | Article |
| series | African Journal of Inter-Multidisciplinary Studies |
| spelling | doaj.art-61da09bb20c74eb485fe13f75e5d04eb2022-12-21T23:17:01ZengResearch and Postgraduate Support DirectorateAfrican Journal of Inter-Multidisciplinary Studies2663-45972663-45892021-07-013110.51415/ajims.v3i1.893Factors Affecting Small and Medium Enterprises’ Financial Sustainability in South AfricaOdunayo Olarewaju0Thabiso Msomi1Durban University of TechnologyDurban University of TechnologyThe dwindling growth of small businesses and their rate of failure in South Africa has been traced to poor financing. Thus, the factors affecting the financial sustainability of small and medium-sized enterprises in South Africa are examined in this study. Using purposive sampling, data were collected from 310 respondents, however six were incorrectly completed. The analysis was based on data collected from 304 respondents which cut across owners and/or managers from small and medium construction, manufacturing, retail, and agricultural enterprises. A quantitative research design that falls under the positivist paradigm was used. Specifically, through a descriptive and multivariate regression analysis, it was found that financial awareness, budgeting, accounting skills, and access to finance have positive and significant effects on the financial sustainability of SMEs with all the variables, having 0.005 probability values, respectively. Out of all the variables examined, budgeting and access to finance have the largest absolute values of 0.425 and 0.373, respectively. Thus, it was concluded that workshops, training, and seminars to improve the financial literacy of small and medium enterprises should be organised. This will improve owner’s ability to deploy the accounting and budgeting skills and they will be exposed to meeting loan criteria and conditions from financial institutions. Also, adequate funds should be allocated to cater for the regular training and development of small business owners using the services of financial experts.https://journals.dut.ac.za/index.php/ajims/article/view/893Financial deficiencysmall businesseseconomic stabilityfinancial training and developmentfinancial access |
| spellingShingle | Odunayo Olarewaju Thabiso Msomi Factors Affecting Small and Medium Enterprises’ Financial Sustainability in South Africa African Journal of Inter-Multidisciplinary Studies Financial deficiency small businesses economic stability financial training and development financial access |
| title | Factors Affecting Small and Medium Enterprises’ Financial Sustainability in South Africa |
| title_full | Factors Affecting Small and Medium Enterprises’ Financial Sustainability in South Africa |
| title_fullStr | Factors Affecting Small and Medium Enterprises’ Financial Sustainability in South Africa |
| title_full_unstemmed | Factors Affecting Small and Medium Enterprises’ Financial Sustainability in South Africa |
| title_short | Factors Affecting Small and Medium Enterprises’ Financial Sustainability in South Africa |
| title_sort | factors affecting small and medium enterprises financial sustainability in south africa |
| topic | Financial deficiency small businesses economic stability financial training and development financial access |
| url | https://journals.dut.ac.za/index.php/ajims/article/view/893 |
| work_keys_str_mv | AT odunayoolarewaju factorsaffectingsmallandmediumenterprisesfinancialsustainabilityinsouthafrica AT thabisomsomi factorsaffectingsmallandmediumenterprisesfinancialsustainabilityinsouthafrica |