The Impact Of Business Support Services To SMMEs In South Africa

Abstract

Small Medium and Micro Enterprises in South Africa were operating in the era of the apartheid regime but were not given enough support and were not a priority in the government of those days. Before democratic transition, the South African government was mainly giving attention to large businesses as well as state-owned enterprises. It was only in the late 1970s and the early 1980s that the South African government realised the importance of the small enterprise sector and its contribution to the countrys economy. The democratic regime of the early 1990s gave SMMEs an opportunity to participate in the South African economy. A White Paper of 1995 introduced the strategy to promote and develop SMMEs in South Africa and to design an SMME policy framework that will focus its attention on supporting and developing SMMEs. The aim was to enable SMMEs to grow as a way of creating a balance in the economy (away from state-owned and large enterprises) As a result, different support mechanisms have been implemented to support and develop SMMEs in the country since the democratic government took over in 1994. This paper evaluates the business support programmes that have been implemented in South Africa since 1994, specifically in the Free State Province for the development and support of SMMEs. In this respect, the paper compares and evaluates the ability of the business support programmes that have been put in place to develop and support SMMEs in order to grow and become sustainable. This is done by means of a brief overview of the international business support services and an assessment of the South African SMME policy environment. The study also conducted five structured interviews with the management representative of the five different business support programmes in the Free State Province. Some of the key findings indicate that not many SMMEs are aware of business support programmes in the Free State and are even less informed as to where to access finances. At the same time, it was found that staff responsible for business support programmes appears to be incompetent, and therefore, deliver poor quality services. From this study it can be concluded that of all the programmes the government-driven initiatives to develop and support SMMEs struggle the most to become operational. The business support programmes focused on markets to some degree, but seldom made it an inherent requirement. This paper recommends that there should be monitoring and evaluation systems available to document the quality of the service delivery to SMMEs in the Province, and to train the staff of the business support programmes to deliver high-quality services to entrepreneurs. The study compared five business support programmes in the Free State with regards to developing and supporting SMMEs in the province. As a result, the value of the findings might well be considered in terms of future provincial planning documents and policy.