The impact of interventions from supporting institutions on managerial competencies: a case of small, medium and micro-sized enterprises in Pietermaritzburg, South Africa.

Abstract

The contribution of Small, Medium and Micro Enterprise (SMME) sector in the economic and social development of a country has been recognised worldwide. Governments around the world have designed interventions to promote the growth of the SMME sector in an attempt to stimulate national economic growth. The South African government, through public and private supporting institutions, devised interventions to provide financial and non-financial support to SMMEs. However, despite these interventions, the failure rate of small businesses in South Africa is still high. Numerous scholars identified lack of managerial competencies as one of the main causes to the failure of SMMEs. Therefore, this study investigated the impact of interventions from supporting institutions on managerial competencies of Small, Medium and Micro-Sized Enterprises (SMMEs) within the context of Pietermaritzburg city in South Africa. The nature of this study is descriptive. A quantitative survey was conducted on a sample of 148 SMMEs’ owners and managers, identified through convenient and snowball sampling. Data were collected by means of personally administered questionnaires. Frequency analysis, crosstabulation analysis with chi-square, Spearman correlation analysis and linear regression analysis were statistical methods employed to analyse the data. The study found that government and private supporting institutions are not the primary sources of developing the managerial competencies of SMMEs’ owners and managers. SMME’s owners and managers rely more on job experience, formal education/training, and In-house training. Most SMMEs’ owners and managers are not utilising different interventions designed by supporting institutions, due to some challenges such as lack of awareness, lack of finance, and too much bureaucracy and red tape. Despite the non-utilisation of services offered by supporting institutions, the study found that receiving interventions from supporting institutions has a significant impact on developing some managerial competencies of SMME’s owners and managers such as conceptual skills and technical skills. Based on the research findings, practical recommendations were provided on how to promote SMMEs through interventions that enhance the managerial competencies of SMMEs’ owners and managers.