"A comparative evaluation of the factors that are influencing the sustainability of the SMME's that are run by the Pakistani nationals versus the local nationals within the jurisdiction of the Nkomazi and Mbombela districts of the Mpumalanga Province."

Abstract

South Africa is currently facing high unemployment levels, which government through its interventionistic ability is aiming to reduce through formalising the informal sector which is seen as the panacea in inducing economic growth and reducing unemployment. Of late the South African survivalist segment of the Small Micro Medium Enterprise sector characterised by Spaza shops is seen to be dominated by foreign migrate micro entrepreneurs particularly of Pakistani origin. This had resulted in black originators of the spaza concept established in the apartheid era being muscled out of sector that is very lucrative. The purpose of the study was to establish why Pakistani micro entrepreneurs have been able to dominate the SMME Spaza sector in Mpumalanga particularly in the Mbombela and Nkomazi Local Municipalities, whilst the objectives of the research sort to determine reasons behind the sustainability of Pakistani enterprises and their ability to be fondant hence creating a difference within the industry. A qualitative research approach that employed the use of a focus group interview of six Pakistani micro entrepreneurs at a neutral venue was the data gathering technique. To maintain anonymity of the respondents’ pseudonyms were utilised and all data transcribed and kept securely to maximise confidentiality. However the inability of black and other foreign micro entrepreneurs taking part in the study from other municipalities within Enhlanzeni District Municipality may have been a limitation in gathering as much data for the study. The findings of the research established that the sustainability of Pakistani micro enterprises was based on the following facets - Experience levels of the micro entrepreneurs - Educational qualifications of the micro entrepreneurs - Entry barriers within the industry - Competitive nature of Pakistani enterprises - The 4 P’s of Marketing - Kinship - And the informal nature of the sector Based on the findings of the research, the study recommended the need to further investigate how kinship impacts of the success and sustainability of enterprises within the spaza sector and how it could benefit black micro entrepreneurs who have been isolated in the sector as government seeks to formalise the sector in order to create employment.