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5.6.20 FIGURE 5.19 WILLINGNESS TO SOLICIT PROFESSIONAL HELP FROM BIG BUSINESSES AND FINANCIAL INSTITUTIONS
Figure 5.19 indicates the willingness of the emerging entrepreneurs to solicit business support from the big businesses and financial institutions.
It is evident from the findings presented in figure 5.19 in the above diagram, that the majority of SMMEs have visions for sustainability. The majority (84 per cent) of the respondents indicated that they were willing to solicit professional help from big businesses and financial institutions. Few SMMEs were reluctant to solicit the support of big businesses and financial institutions.
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strategies for the communities and contributing to employment opportunities in the municipal areas.
5.7.1 THE ROLE OF THE MUNICIPAL OFFICIALS IN ASSISTING THE DEVELOPMENT OF SMMEs IN NONGOMA COMMUNITIES
The municipality encourages social entrepreneurship activities for the community members. Furthermore, the officials play a crucial role in terms of the registration of the SMMEs and the solicitation of various grants to boost their economic activities. The literature review of the study indicated that one of the challenges facing the SMMEs is the lack of skills and business knowledge among the emerging entrepreneurs. In this regard, the Nongoma Local Municipality organises workshops and training that aims to capacitate emerging entrepreneurs with business skills. Furthermore, the municipality has existing steering committees comprising private and business sectors and the provincial Department of Economic Development and Tourism. These stakeholders are committed to ensuring that the impact of the SMMEs in the Nongoma communities yields positive results. Another concern which emerged during the interviews with the municipal officials was the fact that SMMEs are a form of the LED project of the municipality which is an unfunded mandate.
5.7.2 TYPES OF EDUCATIONAL TRAINING PROVIDED BY NONGOMA MUNICIPALITY TO THE SMMEs
The educational training provided by the municipality to the emerging entrepreneurs includes components such as business management, market feasibility, sales and marketing, costing and pricing, operations, financial management and customer service.
These are essential skills required in the business environment for the SMMEs.
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5.7.3 TYPES OF FINANCIAL SUPPORT PROVIDED BY THE MUNICIPALITY TO THE EMERGING ENTREPRENEURS.
Despite the fact that SMMEs are the unfunded mandate in local government, the municipality provides various types of grants in order to boost the economic base of the registered SMMEs in the area. These include a Municipal Infrastructure Grant (MIG) and a Black Business Support Development Programme (BBSDP). Furthermore, the Development Bank of Southern Africa (DBSA) is committed to supporting the emerging businesses. The above mentioned conditional grants are assisting the SMMEs to grow with the local sphere.
5.7.4 THE MONITORING AND EVALUATION OF THE SMMEs IN NONGOMA LOCAL MUNICIPALITY
Monitoring and evaluation has become a key tool in the management of public programmes. Given its importance in the context of the SMMEs, the municipal officials indicated their role in ensuring that SMMEs are sustainable and comply with government legislation. However, tracking their progress and sustainability is a key challenge for the municipal officials of the Nongoma Local Municipality, due to the fact that most SMMEs do not survive for a period of more than five years in the business environment.
5.7.5 THE CONTRIBUTION OF THE SMMEs IN THE ECONOMIC GROWTH IN THE NONGOMA LOCAL MUNICIPALITY
The municipal officials indicated that SMMEs have important roles in the creation and sustainability of an economic base for the Nongoma communities. The existing SMMEs in the form of tuck-shops, street trading, taxi operations, commercial agriculture and livestock have contributed significantly to creating sustainable livelihood strategies for the communities of the Nongoma municipality. It also emerged during interviews with the municipal officials that, in the absence of employment opportunities from the big firms and industries, SMMEs are the only mechanisms which create employment opportunities.
However, it should be noted that, while SMMEs provide some employment opportunities,
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this is not enough, since the majority of the merging entrepreneurs do not have the capacity to employ the assisting staff.
5.7.6 FACTORS AFFECTING THE DEVELOPMENT OF SMMEs IN NONGOMA LOCAL MUNICIPALITY
According to the municipal officials, among the factors affecting the growth and development of SMMEs in the Nongoma Local Municipality, is the lack of proper business planning, accompanied by high levels of community illiteracy. Some officials cited the change in political leadership as a main contributing factor in the sense that the change of municipal administration introduces new officials with little or no commitment towards SMMEs.
5.7.7 THE AVAILABLE STRUCTURES NURTURING AND MENTORING EMERGING ENTREPRENEURS IN THE NONGOMA LOCAL MUNICIPALITY
The input of the municipal officials indicates that there are many governmental and independent/private structures that are committed to assisting emerging entrepreneurs with business skills and knowledge. These structures include Small Enterprise Finance Agency (SEFA), Small Enterprise Development Agency (SEDA, Development Bank of South Africa (DBSA) and Local Government SETA. In addition, there are Non-Profit Organisations (NPOs), Non-Governmental Organisations (NGOs) and foreign donors/funds as well as public-private partnerships who assist in this regard.
5.7.8 THE ROLE OF INNOVATION AND TECHNOLOGICAL ADVANCEMENT IN THE SMME SECTORS
Responding to the role of innovation and technological advancement in improving the efficiency and effectiveness of the SMMEs, the officials indicated that the level of communication and network systems in the modern world has changed drastically, so there is a need to adapt to the global trends of modernisation. Technology for SMMEs implies
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that they use electronic bank transactions, store information on computers and use modern technology such as e-mails and social media networks to communicate with their clients. In essence, this should be a common practice in government institutions of the 21st century as emphasised by public management theorists.
5.9 CONCLUSION
This chapter presented the analysis and interpretation of both the quantitative and qualitative study. The empirical data analysis is aligned with the study objectives and responds to the key questions guiding the study. The principal objective of the study was to explore the relevance of the role of the SMMEs in creating stable and sustainable economic growth which creates adequate employment opportunities, reduces poverty and eliminates economic inequality for the citizens of the Nongoma Local Community. The findings clearly indicate that SMMEs have the potential to steer economic growth for local communities.
Despite this, however, the study noted key elements affecting SMMEs, such as lack of education and training among emerging entrepreneurs and the lack of access to financial support. These findings point towards a need for more coherence of economic planning between all government spheres, NGO, NPOs and interested parties.
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CHAPTER SIX
CONCLUSIONS AND RECOMMENDATIONS
6.1 INTRODUCTION
The study investigated the contributions of SMMEs towards economic development for local communities, with particular reference to the Nongoma Local Municipality. The previous chapter presented findings of the study which clearly indicate an urgent need for the municipality to boost their capacity, as they complement government’s endeavours to create employment opportunities for local municipalities. Based on the issues explored in the study and research findings, this chapter provides general findings and paves the way in the form of proposing recommendations for future studies in the fields of SMMEs and economic development strategies. The first part of the chapter provides general conclusions by reviewing the contributions of each chapter of the dissertation.