The impact of government-driven initiatives for the success of small medium enterprises (SMES) in KwaZulu-Natal, South Africa.

Abstract

Acknowledging the pivotal role that SME’s play in the economy of any country, the South African government has introduced several initiatives specifically targeted at promoting the attractiveness, growth and sustainability of the SME sector, the effectiveness of which have not been fully evaluated regarding SME’s in the construction sector to determine whether they have achieved the intended outcomes of those initiatives. The aim of this research is to investigate the role played by construction SMEs towards improving the economy of the country. Moreover, the study seeks to establish whether the government initiatives have an impact on the effective performance of construction SMEs and whether they have achieved their intended outcomes in KwaZulu-Natal, South Africa. A quantitative research approach was used using a cross sectional questionnaire survey to collect the data and non-probability sampling technique. A total of 201 questionnaires were distributed to active civil engineering (CE) and general building (GB) SME contractors with grades between 2 to 5 in KwaZulu-Natal selected from CIDB construction register database. The total number of 96 questionnaires were returned, representing 48% of the total that were distributed. Moreover 10 questionnaires were distributed to four government entities and five were returned, representing 50% of the total that was distributed. The data was analysed using the Statistical Package for the Social Sciences (SPSS) 25. The results showed that 58.7% of construction SME’s play a pivotal role in employment creation, poverty alleviation, economic growth and balanced society. It also found that 52.7% respondents are aware of Government initiatives, however they are not utilised efficiently. Moreover, the results showed that grades 2 -3 SME contractors are facing more challenges in finance and quality management when compared to grades 4 – 5.