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Research Paper | Entrepreneurship | South Africa | Volume 12 Issue 6, June 2023

Small Medium and Micro Enterprises (SMMEs) Market Related Challenges in uMhlathuze Local Municipality, KwaZulu - Natal, South Africa

Lindokuhle Muziwandile Mkhwanazi

Abstract: This paper emanated from a Master's project which seeks to determine the contribution of Small Medium and Micro Enterprises (SMMEs) in reducing the unemployment in uMhlathuze Local Municipality. However, this paper investigates the SMMEs market related challenges in the study area. The literature shows that in South Africa, the government policy has acknowledged the importance of Small Medium and Micro Enterprises (SMMEs) in the economy. Thus, SMMEs are regarded as the main drivers of employment creation (Clover & Darroch, 2005; Idahosa & Van Dijk, 2016). SMMEs facilitate the potential of self - employment and income generation (Francois, 2015). However, SMMEs are faced with enormous challenges such as lack of obtaining loans from micro lending financial institutions and from commercial banks; municipally laws are not in favour of SMMEs, lack of monitoring and evaluation of SMMEs interventions, and inadequate business skills. SMMEs are also hindered by inaccurate management as well as administration of SMMEs licence applications, lack of business networks, and failure to create and orally present proper business plans (Crush, 2017; Worku, 2017). This study was based on the descriptive research design; hence, it adopted a quantitative research approach in the collection and in the analyses of data. In terms of methods, this study used simple random sampling method which reduces bias in data collection. The study randomly drawn a sample of 80 respondents of both formal and informal SMMEs who were owners/managers of spaza - shops, tuck - shops, retail and wholesale stores, salons, restaurants, clothing stores, hardware and furniture stores. The study also obtained data from street hawkers. Respondents completed their questionnaire with the researcher present to provide assistance where necessary. The data were analysed using Statistical Package for Social Sciences (SPSS) and Microsoft Excel. The findings showed that respondents started SMMEs to make a living since they did not have good education. However, the results revealed that SMMEs were hindered by different challenges and that made them unable to reach their targeted potential of profit maximisation. The challenges included financial constraints, difficult to forecast sales, lack of access to technological advancements, and high transportation costs. To address SMMEs' financial constraints, the study recommends that both public and private sectors should allocate more funds to implement programmes that support SMMEs financially. Since SMMEs had difficulties to forecast sales, the study recommends that SMMEs should collaborate with each other and buy inventories in bulks with discounts, so that they could sell their goods and services at lower prices and increase sales while making profit; in that way, they would even reduce transportation costs. In terms of SMMEs lack of access to technological advancements, the study recommends that SMMEs adopt the use of social media platforms so that they increase their market share.

Keywords: SMMEs, market

Edition: Volume 12 Issue 6, June 2023,

Pages: 682 - 689