Evaluating the performance of small, micro and medium enterprises: a case of Umkhumbane enterpreneurial support centre in metropolitan Durban.

Abstract

Small, Medium and Micro Enterprises are considered the key cornerstone of inclusive and equitable economic development worldwide. They are, however, sadly unable to meet the expected standards envisaged. This is because studies have shown that there is an alarming failure rate of SMMEs globally, and South Africa has not been exempt from this phenomenon. Numerous factors hinder the performance of SMMEs, namely insufficient access to funding, training and development, stiff competition, lack of innovation and marketing skills, crime, corruption, and bad governance. This study aimed to critically evaluate the status quo of manufacturing SMMEs supported by the Umkhumbane Entrepreneurial Support Centre (UESC) in the eThekwini Metropolitan Municipality. The Penrose resource-based view (RBV) theory was considered applicable and most appropriate to evaluate the performance of the manufacturing SMMEs supported by the UESC. The study was underpinned by the interpretivism worldview adopting a qualitative research methodology and it investigated the experiences and perceptions of relevant stakeholders through semi-structured interviews. The non-probability sampling technique was employed through purposive sampling technique to select 15 informed participants who understood the activities and roles of the UESC, in eThekwini Metropolitan Municipality’s jurisdiction. The findings of the study demonstrated that the SMMEs in the UESC were survivalist and most of them employed a few low-skilled people; the majority of which were women and youth from the Umkhumbane Township and its neighbouring areas. Moreover, the study discovered that there were numerous limiting factors affecting the performance of SMMEs of the SMMEs in UESC. It was noted that insufficient access to credit and to training and development seemed to be the most important factors impacting the performance of the SMMEs in the UESC. Thus, the study recommended that government and other relevant stakeholders work together to provide a breeding ground for growth and prosperity of South African SMMEs. In terms of policy priority, those who designed the SMME policies should promote information sharing platforms to all relevant stakeholders during the planning, formulation, implementation, and monitoring and evaluation processes. This included holding meetings with communities, leaders, businesses, service providers, and research and policy institutions to design wellinformed policy frameworks.