Barriers of access to finance for small and medium enterprises within the construction and maintenance sector in Gauteng.

Abstract

This study explored the barriers facing SMEs in the construction and maintenance sector in Gauteng when it comes to accessing funding for growth and expansion and proposes solutions to address the barriers. The aims of this study were to obtain an understanding of the challenges facing SMEs in the construction and maintenance in Gauteng, the extent to which these challenges affect the ability to secure finance as well as possible solutions to address the barriers and improve access to finance for SMEs in the construction and maintenance sector in Gauteng. A non-probability purposive sampling approach was used Semi-structured interviews were conducted with 22 entrepreneurs who own and run businesses in the construction and maintenance sector in Gauteng. NVivo 14 was utilized to analyze the data. The study employed reflexive thematic analysis to explore challenges in accessing finance for SMEs in construction and maintenance in Gauteng province and the possible solutions to these challenges/barriers from the lived experiences of the SMEs. The analysis showed that SMEs take active initiatives in seeking capital for growth, purchases of equipment and tools for meeting the material as well as labour demands of their projects. Lack of equipment and finance was observed to be limiting their growth prospects in terms of access to markets and opportunities, retaining skilled workers, and weathering the competitive environment. Other challenges include managerial challenges and a lack of systems to manage businesses effectively. From the participant’s responses, the financial institution’s requirements do not seem to be well understood, particularly concerning collateral, cash flow requirements, and business performance.